HONDA FACES HARD QUESTIONS AFTER WEAK EARNINGS – Japan’s second-largest automaker cut its full-year outlook by a fifth
Japan’s Honda has slashed its full-year profit forecast, warning of fresh headwinds from U.S. tariffs, global chip shortages, and intensifying competition from China’s electric vehicle makers.
The automaker cut its outlook by a fifth, citing one-off costs linked to its EV push and a shortage of components from Dutch chipmaker Nexperia — now under government control after security concerns tied to its Chinese owner, Wingtech.
Honda also expects a 385 billion yen — or 2.6 billion dollar — hit from U.S. tariffs. Its shares fell nearly five per cent on the news.
But analysts say the bigger problem is strategic, as Chinese EV brands eat into Honda’s market share across Southeast Asia, once a stronghold for Japanese automakers.
Executive Vice President Noriya Kaihara admitted the company has lost its pricing edge in key markets like Thailand, forcing carmakers to offer discounts and incentives — further squeezing profits.
Honda’s downgrade highlights the growing pressure on Japan’s auto industry to adapt — as electric competition and geopolitical risk reshape the global car market.
