Honda forecasts 70% net profit drop citing 'tariff impact'

Japan's Honda Motor connected Tuesday forecast a 70 percent driblet successful nett net for the 2025-26 fiscal twelvemonth arsenic US commercialized tariffs measurement connected the planetary car industry.

The announcement comes aft rival Toyota, the world's top-selling carmaker, predicted a 35 percent year-on-year driblet successful yearly nett net due to the fact that of the levies and different factors.

Honda said it expected nett net of 250 cardinal yen ($1.7 billion) successful the 12 months to March 2026.

"Tariff interaction and betterment efforts" volition person a antagonistic effect connected operating profit, it warned, estimating they volition outgo the institution astir 450 cardinal yen implicit the year.

In an effort to rev up the US car industry, President Donald Trump past period imposed a 25 percent toll connected imported vehicles, dealing a large stroke to Japanese carmakers.

"The interaction of tariff policies successful assorted countries connected our concern has been precise significant, and predominant revisions are being made, making it hard to formulate an outlook," CEO Toshihiro Mibe told reporters Tuesday.

Mibe said Honda would analyse the interaction of US tariffs connected proviso chains and "carefully" marque immoderate decisions connected pricing changes.

Honda, Japan's second-biggest automaker aft Toyota, logged nett net of 835 cardinal yen successful the past fiscal year, a driblet of astir 25 percent on-year and good abbreviated of its February forecast of 950 cardinal yen.

"Our automobile concern experienced a diminution successful income measurement chiefly successful China and the ASEAN region" successful Southeast Asia, Mibe said.

It was besides "impacted by accrued incentives for EV income successful North America", though "hybrid conveyance income expanded".

But Honda whitethorn inactive person a amended accidental of weathering Trump's tariff onslaught than its competitors successful Japan, analysts said.

Late past period Trump softened the car tariffs by signing an enforcement bid to bounds the interaction of overlapping levies connected carmakers.

He besides said helium would springiness the manufacture a two-year grace play to determination proviso chains backmost to the United States.

This is bully quality for Honda, which builds much than 60 percent of the vehicles it sells successful the United States successful the country.

That is "the highest percentage" of each large Japanese automakers, Bloomberg Intelligence car expert Tatsuo Yoshida told AFP up of the results.

That means the interaction from tariffs volition beryllium "comparatively smaller for Honda", helium added.

Also connected Tuesday, Honda said it would postpone by 2 years a task announced past period to found an electrical conveyance proviso concatenation successful Canada.