Honda Motor Company, a prominent Japanese automaker, recently reported a slight decrease in global revenues during the first quarter of the current fiscal year (FY25), spanning from April to June 2025. The company’s global revenues dropped by 1.2% to JPY 5,340.3 billion, while operating profit saw a significant decline of nearly 50% to JPY 244.1 billion. Net profits also took a hit, falling by 50% to JPY 197 billion. Honda attributed these declines to the impact of US import tariffs and one-off costs associated with its electric vehicle (EV) program.
Despite the challenges faced in the first quarter, Honda remains optimistic about its full fiscal year forecast. The company expects global revenues for the fiscal year ending in March 2026 to decrease by 2.7% to JPY 21.1 billion. However, there have been positive signs with strong vehicle sales growth in North America and robust motorcycle demand in markets like Vietnam and Brazil.
In response to the changing economic landscape, Honda has revised its operating profit forecast for the full fiscal year to JPY 700 billion, up from the previous estimate of JPY 500 billion. This adjustment was made following the reduction of US import tariffs from 25% to 15% at the start of August. Despite the increase in the operating profit forecast, it still represents a significant decrease from the previous fiscal year’s operating profit of JPY 1,213 billion. The estimated impact of the US tariffs for the full fiscal year has been revised down to JPY 450 billion.
Furthermore, Honda has adjusted its average US dollar exchange rate assumption for the full year from JPY 135 to JPY 140, which is expected to enhance the profitability of its US operations. Net profits for the full year are projected to decline by almost 50% to JPY 420 billion, an improvement from the previous forecast of JPY 250 billion.
In conclusion, Honda is navigating through challenging market conditions while remaining focused on its long-term goals and strategies. The company’s ability to adapt to external factors and optimize its operations will be crucial in maintaining its position as a leading player in the automotive industry.
