Honda's profit slips as Trump's tariffs take toll on Japanese automakers

Honda reported Friday that its profit for the first fiscal half through September fell 37 per cent from the previous year, as the damage from President Donald Trump's tariffs offset the lift from solid motorcycle sales.

Tokyo-based Honda Motor Co. recorded a 311.8 billion yen (USD2 billion) profit for April-September, down from 494.6 billion yen a year before.

Sales over the six months totalled 10.6 trillion yen (USD 69 billion), down 1.5 per cent from nearly 10.8 trillion yen.

Honda lowered its profit projection for the fiscal year through March 2026 to 300 billion yen (USD 2 billion), which would be a decline of 64 per cent from 835.8 billion yen the year before. It had earlier forecast a 420 billion yen (USD 2.7 billion) annual profit.

 

Honda, which makes the Accord sedan and Odyssey minivan, said an unfavourable currency rate also hurt its bottom line, erasing 116 billion yen (USD 756 million) from its operating profit over the six months.

But Honda achieved record sales in motorcycles, led by strong results in the Asian region, excluding Vietnam. Honda said it sold more than 9 million motorcycles in Asia during the first half, up from 8.8 million a year ago. Honda's motorcycle sales improved in every global region, except for Europe, at a record 10.7 million units sold.

Honda's global vehicle sales in the first half totalled 1.68 million vehicles, down from 1.78 million. By region, vehicle sales grew in North America, but fell in Japan, the rest of Asia and Europe.

Although it helps that Honda produces many of its vehicles in the US, tariffs caused a decline of 164 billion yen (USD 1.1 billion) in operating profit over the six-month period, the company said.

Adding to its challenges, Honda has faced a chips shortage after the Dutch government in late September took control of Nexperia, which is based in the Netherlands but owned by Chinese company Wingtech Technology, citing national security concerns.

In response, China blocked shipments of chips from Nexperia's plant in the southern Chinese city of Dongguan, though it has now allowed those exports to resume.

Vehicle production at Honda's plant in Celaya, Mexico, has halted since Oct. 28, while production at North American plants were adjusted, starting October 27, due to the Nexperia-related supply disruptions. Honda did not give a date on when production will be restored to normal levels.

Honda stocks on Friday gained 1.8 per cent to 1,585 yen (USD10) in Tokyo trading.