Honda Motor Co. is expecting a ¥450 billion (US$3 billion) hit to its full-year profit as it braces for the fallout of U.S. President Donald Trump’s auto tariffs, joining rivals reeling from the trade war.
Operating profit is forecast to decline to around ¥500 billion in the current fiscal year through March 2026 — far short of analyst estimates of ¥1.35 trillion. Profit in the fiscal year ended March 31 came in at ¥1.21 trillion following a weak fourth quarter, the company said in a statement Tuesday.
“The impact of tariff policies in various countries on our business has been very significant, and frequent revisions are made, making it difficult to formulate an outlook,” Chief Executive Officer Toshihiro Mibe told reporters. The automaker, which has already outlined plans to move production of its hybrid Civic from Japan to the U.S., is considering whether to expand U.S. production capacity in response to tariffs.
Honda joins a growing list of global automakers tallying the cost of Trump’s tariffs. General Motors Co. has slashed its full-year profit guidance by as much as $5 billion, while Ford Motor Co. is bracing for a $1.5 billion annual hit. Toyota Motor Corp. sees a $1.2 billion profit drop in just April and May. On Monday, Mazda Motor Co. said it was withholding its annual guidance until the dust settles, adding the impact from tariffs could amount to as much as $68 million in April alone.
The U.S. represents the biggest market for five of Japan’s largest automakers, including Honda. The company sold roughly 1.4 million cars in the U.S. in 2024, according to Bloomberg Intelligence, almost 40% of which were imported.
Honda also Tuesday said it has postponed plans to establish an electric vehicle supply chain in Ontario, Canada, by two years, owing to a downturn in demand.
The previously announced plan included a battery plant and an EV factory with an annual production capacity of 240,000 vehicles.
“The growth of the electric vehicle market has slowed more than initially expected, making it difficult to anticipate further progress,” Mibe said. Changes to the company’s electrification strategy will be explained in detail during a business update on May 20.
While Honda may have dodged a bullet by walking away from a deal to tie up with struggling rival Nissan Motor Co., it will have to go it alone as the global auto market is roiled by the U.S. tariffs and intense competition in China.
Honda had signed an agreement with Nissan in December to combine both brands under a single holding company. But negotiations quickly began to deteriorate, and ultimately the alliance was formally ended within a few months. Disagreements between the two legacy brands, who refused to meet on equal footing, drew to a swift close what in theory could have created a titan capable of competing with Toyota and other industry heavyweights.
In one bright spot, Honda’s motorcycle business accounted for half its operating profit, and grew during the previous fiscal year. Its auto segment decreased, mostly in China.
Both trends are expected to continue during the current fiscal year, the company said.
Nicholas Takahashi, Bloomberg News
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