Honda Reports Sharp Decline in Q1 Profit
(MENAFN) Honda Motor reported a sharp 49.6% year-on-year decline in its quarterly operating profit for April through June, as ongoing US tariffs continue to weigh heavily on Japanese automakers.
Operating profit plunged to 244.17 billion yen ($1.65 billion) in the first quarter, down from 484.7 billion yen recorded in the same period last year.
Revenue also slipped slightly to 5.34 trillion yen, compared to 5.4 trillion yen a year earlier, according to financial results released Wednesday.
These results fell short of market expectations for the quarter.
"Operating profit decreased by 49.6%, to JPY 244.1 billion from the same period last year, due mainly to tariff impacts as well as negative foreign currency effects, which were partially offset by increased profit attributable to sales impacts," Honda said in an official statement.
Despite these challenges, Honda indicated that the impact of auto tariffs is expected to be less severe than previously forecast.
The company also raised its full-year operating profit projection, anticipating a boost from currency depreciation. The updated forecast now stands at 700 billion yen, up 200 billion yen—or 40%—from the earlier estimate of 500 billion yen.
The Trump administration recently lowered reciprocal tariffs on Japanese imports to 15%, although the exact timeline for implementing this reduction remains uncertain.
Under a broader trade agreement, Japan has committed to investing $550 billion in the US, while America plans to cut tariffs on Japanese cars from 27.5% to 15%.
Given that the auto industry is a cornerstone of Japan’s economy, sustained higher tariffs could continue to inflict significant damage on leading manufacturers like Toyota and Honda, both of which depend heavily on the US market.
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