The Japanese Honda Motor predicted a 59% decrease in profits in the current financial year and said it would suspend a plan to build an electric vehicle supply chain in Canada, amid the uncertainty derived from the tariffs of the president of the United States, Donald Trump.
Japan’s second largest car manufacturer expects its operating income to total 500,000 million yen (3,380 million dollars) in the year ending on March 31, 2026, compared to 1.21 billion yen of the fiscal year that has just ended (March 31).
The Honda forecast is the most recent sign of the difficulties that car manufacturers are having to overcome Trump tariffs on cars manufactured abroad, at the same time that the industry is affected by the rise of Chinese producers of electric vehicles.
Honda also announced that a plan announced in April 2024 would suspend for approximately two years to build an electric vehicle supply chain in Ontario, Canada. This decision was made due to the current deceleration of the demand for electric vehicles, he said.
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Fusion conversations between Honda and Nissan were interrupted earlier this year, although both maintain a technological cooperation agreement. These alliances are considered increasingly important for car manufacturers to counteract the threat of fast expansion electric vehicles, especially in China.
“Although the automotive industry is in a very difficult situation, we will undoubtedly seek new growth paths through strategic alliances,” said Toshihiro Mibe, executive director of Honda, at a press conference. He added that no progress has occurred in the possible alliance with Nissan since the negotiations in February were suspended.
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Honda provides an impact of 650,000 million yen on its operational benefits of fiscal year 2026 due to tariffs in several countries, of which 300,000 million yen were due to its impact on imports of about 550,000 finished vehicles. The company projected that it could compensate about 200,000 million yen of tariffs with measures to mitigate its impact, as reported on its presentation.
With Reuters information
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