An indication marks the placement of a Honda dealership in Libertyville, Illinois, on Dec. 18, 2024.
Scott Olson | Getty Pictures
Japanese auto big Honda‘s first-quarter working income fell 50% yr over yr on Wednesday, lacking estimates as a consequence of U.S. auto tariffs and a stronger yen.
Listed below are Honda’s outcomes in contrast with imply estimates from LSEG:
- Income: 5.34 trillion yen vs. 5.25 trillion yen
- Working revenue: 244.17 billion yen vs. 323.48 billion yen
Within the first quarter of its fiscal yr, which ends on June 30, 2026, Honda’s income got here in at 5.34 trillion yen, beating imply estimates from LSEG.
Working revenue fell about 50% to 244.17 billion yen, lacking LSEG’s imply estimates of 323.48 billion yen.
Nevertheless, Japan’s second-biggest carmaker mentioned that the affect of the auto tariffs could be smaller than anticipated, estimating a 450 billion yen hit for the yr in comparison with the 650 billion yen forecasted beforehand.
Honda additionally anticipated the yen to weaken additional, because it raised its full-year working revenue forecast by 200 billion yen, or 40%, to 700 billion yen in comparison with its earlier forecast of 500 billion yen.
The U.S. accounted for round 1 / 4 of Honda’s exports from Japan within the first half of the yr. Its world gross sales fell 5% over the interval, impacted by declines in China, Asia, and Europe.
Auto exports to the U.S. are a cornerstone of Japan’s economic system, making up 28.3% of all shipments in 2024, Japan’s customs data confirmed. In response to U.S. automobile market CarPro, Asian automakers made up six of the top eight automakers within the U.S. by gross sales quantity in 2024, with Honda in fourth place.
Japan’s carmakers have been doubling down on value cuts to retain market share after U.S. President Donald Trump‘s 25% tariffs on imported autos, which got here into impact on April 3.
Trump final month announced a brand new commerce cope with Japan that’s mentioned to incorporate a decrease tariff price of 15% on Japan-made car imports to the U.S. Nevertheless, the timeframe for the change to take impact was not clarified.
In June, the worth of Tokyo’s automobile exports to the U.S. fell 25.3% yr over yr, despite the fact that automobile export volumes to the U.S. rose by 4.6% in the identical interval, based on data from Japan’s trade ministry.
Different Japanese automobile makers have additionally been affected by commerce headwinds. On July 30, Japan’s Nissan reported a internet lack of 115.8 billion yen for the primary quarter, attributing opposed change price actions and the affect of U.S. tariffs.
Toyota, Japan’s second-biggest carmaker, is about to report earnings on Thursday, with economists polled by Reuters anticipating that it’s going to put up its lowest working revenue in over two years. That comes regardless of the corporate reporting that its worldwide sales reached document highs within the first six months of the yr.
Again in February, Honda and Nissan terminated talks over a $60 billion merger, which might have created the world’s third-largest automaker by gross sales quantity.
Japanese Prime Minister Shigeru Ishiba mentioned Monday he wouldn’t hesitate to talk with President Donald Trump to make sure the reduce to U.S. car tariffs is carried out quickly.
The nation’s chief commerce negotiator Ryosei Akazawa left for Washington on Tuesday, looking for to press Trump to signal an govt order that might affirm the precise date for the auto tariffs to be lowered.