Japan’s two largest automakers delivered stellar earnings for the most recent quarter – Honda’s quarterly profit setting a new record. And, along with Toyota, it forecast good results for the coming months. But that doesn’t guarantee smooth sailing, reports Headlight.News.
Honda CEO Toshihiro Mibe had a reason to smile this week.
Honda on Wednesday reported a record operating profit of 530.7 billion yen – or $3.28 billion for the fiscal quarter ending June 30.
That was double what it delivered a year ago. Meanwhile, net earnings came in at 90.8 billion yen – or $561.0 million, marking a sharp turnaround from the deficit it found itself in during the prior fiscal year ending March 30.
The number two Japanese automaker issued its final report a day after arch-rival Toyota which posted a net profit of 1.48 trillion, or $8.8 billion, a 76% year-over-year jump that well exceeded analysts expectations for the April-June quarter.
Upbeat forecasts
The Honda Prelude.
Toyota officials were optimistic about the rest of their fiscal year. They foresee a 6.54% increase in revenues for the full year, while raising their net profit forecast. That said, those earnings are still expected to fall 15.5%, to 3.25 trillion yen. The original forecast foresaw revenues of 51.00 trillion yen and a net profit of 11.18 trillion yen.
Honda now expects a full fiscal yet net profit of 400 billion yen, which would be $2.5 billion at current exchange rates. It lost 423.9 billion yen for the year ending March 31, 2026, or $2.7 billion. Revenues are forecast to reach 24.15 trillion yen, up from 21.8 trillion yen.
Several factors appear to be playing out for the two automakers, including the weak Japanese yen. Toyota – which has launched a $6 billion stock buyback – also lowered the hit it anticipated taking from the ongoing Iran War. The automaker has been a major player in the growing Mideast automotive market.
Honda can’t hide challenges ahead
Honda scrapped plans for an “EV Hub” in Ohio and will still take write-offs this year.
There are challenges ahead, however. Honda, in particular, took a major hit due to the weakening of the global EV market. That’s especially the case in the U.S. where it scrubbed plans to launch a variety of products that were to be assembled at a new “EV Hub” based out of its sprawling manufacturing network in Ohio.
During an earnings announcement on Wednesday, Honda CFO Masao Kawaguchi warned that more write-downs are coming as the company continues reversing the EV program put in place by CEO Toshihiro Mibe. It currently expects an EV charge of 520.0 billion yen this fiscal year, or $3.21 billion.
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More U.S. production coming
Toyota plans to sharply expand U.S. production.
While Honda may be backing out of its EV plans for the U.S., Mibe has signaled the company is planning to expand the rest of its electrification efforts. That will mean not only more hybrid models, but an increase in the number of products that will be offered solely with hybrid powertrains. That’s expected to include the next-generation CR-V. More than half of those crossovers sold in the States last month were equipped with hybrid drive.
Mibe and other officials have also signaled the likelihood that Honda will add a new plant in the U.S. to help further localize production – and potentially shield it from the Trump administration’s tariffs on foreign-made vehicles.
With growing uncertainty about the trade benefits of building in Canada and Mexico, Toyota is also set to significantly expand U.S. production as part of a $10 billion investment program Chairman Akio Toyoda announced this year. Of that, $3.6 billion will go to moving production of the full-size Toyota Tacoma pickup back to the U.S. by 2030.
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