Honda Motor Co. forecast a steep 59% drop in operating profit for the current fiscal year as global tariff pressures and a slowdown in electric vehicle demand force the Japanese automaker to revise its strategy.
The Tokyo-based company projects operating profit of ¥500 billion ($3.7 billion) for the year ending March 2026, down from ¥1.21 trillion in fiscal 2025. Net income is expected to fall 70% to ¥250 billion.
Honda cited an estimated ¥650 billion tariff impact, with additional tariffs on completed vehicles from Canada and Mexico expected to cost ¥300 billion alone.
The carmaker also announced it would postpone by about two years its planned ¥15 billion ($111 billion) investment in an EV supply chain in Ontario, Canada due to “current slowdown in EV demand.”
For the year ended March 31, Honda’s operating profit fell 12.2% to ¥1.21 trillion, while revenue rose 6.2% to ¥21.69 trillion.
The motorcycle division was a bright spot, achieving record global sales of 20.57 million units and operating profit of ¥663.4 billion, up 19.3% year-on-year.
Honda will introduce a dividend on equity policy targeting 3% and plans to pay ¥70 per share for the current fiscal year, up from ¥68 in fiscal 2025.
