Honda Faces Financial Hurdles Amid Tariff Turmoil

Honda's profit declined due to decreased vehicle sales in China and potential impacts of U.S tariffs. The company plans to reduce tariffs' effects by focusing on U.S. production and continued electric vehicle development. Honda's forecast suggests a significant profit drop amidst these ongoing challenges.

Honda's profit has taken a hit this fiscal year, dropping by 24.5% as vehicle sales in China have decreased. The Japanese automaker cautioned on Tuesday that President Donald Trump's tariffs would further impact its financial outcomes.

Honda, headquartered in Tokyo, reported an annual profit of 835.8 billion Yen, a decline from the previous year's 1.1 trillion Yen. Despite the dip in profit, Honda experienced a 6.2% rise in annual sales, reaching 21.69 trillion Yen. However, research and development expenditures proved costly despite record global motorcycle sales exceeding 21 million. Hybrid vehicle sales performed well, particularly in the U.S., and the company's per vehicle profitability showed improvement.

The Executive Vice President, Noriya Kaihara, highlighted that Trump's tariffs could significantly hurt profits, potentially wiping out 650 billion Yen by March 2026. Nevertheless, Honda remains committed to minimizing tariffs' impact by shifting auto production to the U.S. in the long term and maintaining plans to expand electric vehicle output, as CEO Toshihiro Mibe reiterated.

(With inputs from agencies.)