Honda experienced a 50% reduction in quarterly profits, attributing this decline to tariffs and electric vehicle sales losses. The quarterly operating profit fell to 244bn yen, influenced by a 124bn yen tariff impact. The automotive sector has suffered due to US tariffs aiming to rejuvenate local car manufacturing, resulting in increased tariffs on imports. A recent framework agreement with Japan has reduced tariff impacts slightly. Honda anticipates a cumulative tariff cost of 450bn yen over the next few years, reflecting a less severe situation than initially expected due to price adjustments.
Honda reported a 50% drop in quarterly profits, primarily due to a 124bn yen hit from tariffs and 113bn yen in losses on electric car sales in the US.
The tariffs imposed by Trump targeted the car industry specifically, aiming to revive American car manufacturing, causing significant strain on international manufacturers.
Trump's tariffs increased import taxes on vehicles from countries including Japan to 27.5%, affecting Honda's operational costs and overall profit margins.
Honda estimates the tariffs will cost it 450bn yen by March 2026, which is lower than previous estimates due to price increases in the US market.
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