Honda Motor, a Japanese automaker, is bracing for a significant impact on its full-year profit as a result of US President Donald Trump’s auto tariffs. The company anticipates a Y450bn ($3bn) hit, causing its operating profit to drop to around Y500bn for the fiscal year ending March 2026, a figure well below analyst expectations.
Despite posting a profit of Y1.21tn for the fiscal year ending 31 March, Honda is facing challenges due to the tariffs imposed by various countries. CEO Toshihiro Mibe acknowledged the difficulties in formulating a clear outlook due to the frequent revisions in tariff policies globally.
To mitigate the effects of the tariffs, Honda is shifting production of its hybrid Civic from Japan to the US and exploring options to expand its American production capacity. The automaker joins other major players in the industry, such as General Motors, Ford Motor, and Toyota Motor, in calculating the financial toll of Trump’s trade policies.
General Motors has lowered its profit forecast by up to $5bn, while Ford expects a $1.5bn impact. Toyota has reported a $1.2bn profit decline for April and May alone, and Mazda Motor has postponed its annual guidance due to potential impacts reaching $68m for April.
The US market is crucial for Japanese automakers, with Honda selling approximately 1.4 million cars there in 2024, with nearly 40% of them being imports. In addition, Honda saw a 3.4% decrease in global production to 329,664 units in March 2025, mainly attributed to a drop in overseas production.
As the automotive industry navigates the shifting tariff landscape, real-time data and market-leading analysis are essential. Companies can benefit from tools like GlobalData’s Strategic Intelligence to stay informed and make informed decisions in this challenging environment.
In conclusion, Honda Motor and other automakers are facing significant challenges due to the impact of trade policies and tariffs. By adapting their production strategies and seeking ways to mitigate financial losses, these companies are working towards maintaining profitability in a complex and evolving global market.
