TOKYO (Reuters) -Honda Motor slashed its full-year profit forecast by 21% on Friday, hurt by one-time electric vehicle costs, worsening sales in China and other Asian markets and a shortage of parts equipped with Nexperia chips.
Japan’s second-largest automaker cut its operating profit forecast for the year through March 2026 to 550 billion yen ($3.65 billion) from 700 billion yen.
For the first half of the current financial year, Honda’s automobile business posted an operating loss, due in large part to 224 billion yen worth of one-time expenses related to electric vehicles. The company now expects its global EV sales ratio to be 20% in 2030, down from a previous target of 30%.
It now expects to sell 925,000 vehicles in Asia – including China – for the current financial year, down from a previous target of 1.09 million cars.
Competition in Southeast Asia has intensified due to the entry of Chinese automakers, which prompted firms in the region to offer consumers higher incentives or lower prices, Executive Vice President Noriya Kaihara said on Friday.
“We recognise that a fundamental review is necessary for Asia,” Kaihara said. “However, from this fiscal year through the next, there’ll be no particularly new models.”
Honda posted a 25% drop in its July-to-September operating profit to 194 billion yen, compared with an average 212.1 billion yen profit expected from nine analysts polled by LSEG and a 257.9 billion yen profit in the July-to-September quarter in 2024.
($1 = 150.7800 yen)
(Reporting by Daniel Leussink; Editing by Himani Sarkar and Thomas Derpinghaus)
