Honda's Profits Tumble Amid Tariffs and a Strong Yen

Published 9 hours agoHMC

Honda's Profits Tumble Amid Tariffs and a Strong Yen

Honda Motor Co. has reported a notable 76% drop in its operating profit for the fiscal year ending March 31, 2026. The company now forecasts an operating profit of 500 billion yen ($3.38 billion), a steep decline from the 1.21 trillion yen achieved in the previous fiscal year.

The significant profit slump is primarily due to the U.S. tariffs imposed by President Donald Trump and the effects of a strengthening yen. These factors are said to overshadow the growing demand for Honda's hybrid vehicle lineup. Despite robust sales in the North American market, Reuters noted that global vehicle sales saw a 1.5% decline, reaching 2.8 million units over the first nine months of 2024, with sales in China dropping sharply by 29%.

In response to these challenges, Honda has enacted cost-saving measures, including workforce reduction and suspension of operations at certain manufacturing plants. Meanwhile, Honda's stock showed a slight uptick, closing at $30.93 on May 13, 2025, reflecting a modest 1.58% increase. The company's strategic focus remains on navigating economic pressures and sustaining demand in its key markets.

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