By Stephen Wilmot

Tariffs could cost Japan's second-largest automaker up to 650 billion yen this financial year-equivalent to $4.4 billion and almost half last year's profit.

Reporting results Tuesday, Honda forecast a roughly two-thirds slide in operating profit for the year through March 2026, due to tariffs and a stronger yen.

Chief Executive Officer Toshihiro Mibe said the guidance represented a worst-case scenario. "I think the tariff impact will continue to change as time goes by," he told a press conference.

Honda will partly offset the tariff hit by cutting costs and shifting some carmaking to the U.S., including production of the five-door Civic hybrid and some CR-V sports-utility vehicles.

Unlike Toyota, which included a tariff impact for April and May alone in its annual profit guidance last week, Honda assumed that today's 25% levies on autos and parts shipped to the U.S. will persist. It also assumed all components would be affected, even those that could end up being imported duty-free because they might comply with the U.S. Mexico Canada Agreement.

Rival Nissan, which also reported results Tuesday, didn't give an annual profit forecast, citing the tariff uncertainty. New CEO Ivan Espinosa said Nissan would cut 20,000 jobs and close seven factories.

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(END) Dow Jones Newswires

May 13, 2025 07:06 ET (11:06 GMT)

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