Honda’s profit falls as Trump’s tariffs hurt earnings
Honda reported a 42 percent drop in profit in the nine months to December from a year ago as US President Donald Trump’s tariffs hurt the Japanese automaker’s earnings.
Tokyo-based Honda Motor Co’s profit in the three quarters fell to 465.4 billion yen ($4.2 billion) from 805.2 billion yen.
This is the second year in a row that profits have fallen for Honda, maker of the Accord sedan, Civic compact and Odyssey minivan.
Sales in the three quarters were 15.98 trillion yen, down 2.2 percent from the previous year.
Honda kept its fiscal year profit forecast at 300 billion yen.
While the slowdown in electric vehicles in the US market has been one of the negative factors, the relatively healthy performance in the motorcycle division has been a plus, according to Honda.
Honda lowered its global EV sales rate forecast for 2030 to 20 percent from its previous target of 30 percent.
It also said it had canceled the development of some EV models because the EV market was changing.
The Trump administration, which has backed the oil and gas industry, has backed away from previous programs that supported the proliferation of electric vehicles and repealed programs put in place during the Biden administration that promoted environmentally cleaner cars and trucks.
Trump reduced tariffs on cars and auto parts to 15 percent in 2025 from the 25 percent he had originally announced.
Japan has pledged to invest US$550 billion ($778 billion) in US projects.
The tariffs are a major blow to Japan’s export-driven economy, including its automakers.
Last week, Japan’s largest automaker, Toyota Motor Corp., reported a decline in recent profits and announced that chief financial officer Kenta Kon would become its new CEO and chairman.
Prime Minister Sanae Takaichi, who took office as Japan’s first female leader in October, scored a landslide victory in parliamentary elections for her ruling party over the weekend.
This is expected to make it easier for the Liberal Democratic Party to advance its policies, including supporting growth by increasing government spending, particularly on technology and defence.
Honda shares rose 2.1 percent in Tuesday trading.
The Nikkei 225 index finished 2.3 percent higher, a record high for the second day in a row, a rise fueled in part by Takaichi’s popularity.
