Honda forecasts profit decline as it shifts focus to U.S. market
Honda predicts a 59% drop in profits for the current fiscal year due to new tariffs imposed by U.S. President Donald Trump, reports Reuters. The company is also suspending plans to build an electric vehicle supply chain in Canada.
Honda, the second-largest Japanese car manufacturer, anticipates a significant drop in profits for the current fiscal year, according to Reuters.
The company's operating profit is expected to be 500 billion yen, which represents a 59% decrease compared to 1.21 trillion yen in the previous year. The primary cause of this situation is the new tariffs introduced by Donald Trump's administration.
The company announced it will suspend, for about two years, the plan to build an electric vehicle supply chain in Ontario, Canada. This decision is due to the slowdown in demand for electric vehicles.
The Japanese giant estimates that tariffs in various countries will reduce its operating profit in the 2026 fiscal year by 650 billion yen, of which 300 billion yen will result from tariffs on the import of approximately 550,000 finished cars.
Honda moves production to the USA
In April, the Japanese corporation announced the transfer of production for the hybrid version of the Civic model, intended for the American market, from Japan to a plant in the United States.
According to Kyodo, due to high demand for this model in the USA, production will be moved to a factory in Indiana, where gasoline engine versions are already being produced.
Mitsubishi Motors had previously decided to suspend shipments of new vehicles to American dealers in response to Trump's recent decisions. The company does not have factories in the USA and delivers all vehicles sold in that market from Japan and other countries. Audi made a similar decision.
