Honda Motor Co. has issued a stark warning about future earnings, forecasting a 70% drop in profits for FY2026 after concluding a turbulent fiscal year marked by geopolitical and market headwinds.
For FY2025, Honda’s profit dropped to ¥835.8 billion ($6.2 billion), down 24.5% year-over-year. The automaker cited persistent U.S. tariffs and falling vehicle demand in China — two of its largest international markets — as primary pressures.
The company’s operating profit declined 12.2%, while total revenue rose by 6.2% to ¥21.7 trillion, offering a glimpse of resilience in diversified markets.
As part of cost-control efforts, Honda has postponed its massive EV and battery production project in Canada valued at $11 billion, signaling a broader pullback on aggressive investment.
With China’s demand faltering and the U.S. implementing aggressive import taxes, Honda is re-evaluating global production routes and may shift supply chains to more stable trade environments.
Despite these setbacks, Honda’s motorcycle business delivered exceptional results, achieving record-high operating profits and volumes — highlighting consumer strength in lower-cost, high-efficiency vehicles.
Honda executives remain cautiously optimistic, emphasizing adaptation, resilience, and lean investment as they navigate a volatile economic climate.
