An indication marks the placement of a Honda dealership in Libertyville, Illinois, on Dec. 18, 2024.
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Japanese auto large Honda‘s first-quarter working earnings fell 50% yr over yr on Wednesday, lacking estimates because 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 March 31, 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 impression of the auto tariffs can 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 international 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 financial system, making up 28.3% of all shipments in 2024, Japan’s customs knowledge confirmed. In accordance with U.S. automobile market CarPro, Asian automakers made up six of the highest 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 automobiles, which got here into impact on April 3.
Trump final month introduced a brand new commerce take care of Japan that’s mentioned to incorporate a decrease tariff fee 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, regardless that automobile export volumes to the U.S. rose by 4.6% in the identical interval, in keeping with knowledge from Japan’s commerce ministry.
Tariffs hit Japan’s auto giants
Different Japanese automobile makers have additionally been affected by commerce headwinds. On July 30, Japan’s Nissan reported a web lack of 115.8 billion yen for the primary quarter, attributing hostile change fee actions and the impression of U.S. tariffs.
Toyota, Japan’s largest carmaker, is about to report earnings on Thursday, with economists polled by Reuters anticipating that it’s going to submit its lowest working revenue in over two years. That comes regardless of the corporate reporting that its worldwide gross sales reached report 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 minimize to U.S. vehicle tariffs is applied 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 may verify the precise date for the auto tariffs to be lowered.
