Honda: tariffs and technology force change in strategy

Honda expects its operating profit to fall by close to 60% this financial year. The principal driver is the imposition of tariffs on vehicle and component imports into the US, and the additional costs and disruption these have engendered. Further, despite heavy investment to make electric vehicles (EVs) in Japan and the US, the market’s failure to achieve the kind of volumes expected means Honda has performed something of a major technology pivot back to hybrids. At the same time, in direct response to the financial implications of tariffs, Honda is reviewing what it makes where and adapting the long-term roles of various factories.