Anabelle Colaco
11 Feb 2026, 14:51 GMT+10
TOKYO, Japan: Honda Motor Co. posted a sharp decline in profit for the nine months through December, underscoring the growing pressure on Japanese automakers from U.S. trade policy shifts and a cooling electric-vehicle market.
Tokyo-based Honda reported a profit of 465.4 billion yen (US$3 billion) for the period, down 42 percent from 805.2 billion yen a year earlier. It marked the second consecutive year of profit declines over the same nine-month span for the maker of the Accord sedan, Civic compact, and Odyssey minivan.
Sales during the period fell 2.2 percent to 15.98 trillion yen ($102.6 billion). Despite the downturn, Honda maintained its full-year profit forecast of 300 billion yen ($1.9 billion).
Honda cited several headwinds, including slowing demand for electric vehicles in the U.S. market. That weakness offset stronger performance in its motorcycle business, which the company said helped cushion the broader impact on earnings.
Reflecting changing market conditions, Honda lowered its global EV sales ratio target for 2030 to 20 percent, down from a previous goal of 30 percent. The automaker also said it has canceled development of some electric vehicle models, acknowledging that the EV market was evolving faster than expected.
Policy changes in the United States have added to the pressure. The Trump administration has rolled back programs that encouraged the adoption of electric vehicles during the Biden administration, favoring oil and gas production instead. While President Donald Trump reduced tariffs on automobiles and auto parts to 15 percent from an earlier proposed 25 percent last year, the levies continue to weigh on Japan's export-dependent economy.
Japan has pledged $550 billion in investment in U.S. projects as part of broader economic cooperation, but tariffs remain a major challenge for automakers reliant on overseas sales.
Honda's struggles mirror those of its peers. Last week, Toyota Motor Corp., Japan's largest automaker, also reported a decline in recent profit and announced leadership changes, naming Chief Financial Officer Kenta Kon as its next chief executive and president.
The broader political backdrop in Japan has shifted as well. Prime Minister Sanae Takaichi, who took office in October as the country's first female leader, secured a landslide parliamentary election victory for the ruling party over the weekend. The result is expected to strengthen the Liberal Democratic Party's ability to advance policies that boost economic growth, including increased government spending on technology and defense.
Investors appeared encouraged by the wider market momentum. Honda shares rose 2.1 percent in trading on February 10, while Japan's Nikkei 225 index climbed 2.3 percent, extending record highs for a second consecutive session amid optimism linked to Takaichi's political standing.
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