ISTANBUL – Honda Motor saw its quarterly profit drop 49.6 percent year-on-year from April to June as US tariffs continue to hit Japanese automotive manufacturers.
The company’s operating profit fell to 244.17 billion yen (USD1.65 billion) in the first quarter from 484.7 billion yen during the same period of the previous year.
Honda’s revenue came in at 5.34 trillion yen, down from 5.4 trillion yen, according to financial results released Wednesday.
The figures were below expectations for the quarter.
“Operating profit decreased by 49.6 percent, to JPY 244.1 billion from the same period last year, due mainly to tariff impacts as well as negative foreign currency effects, which were partially offset by increased profit attributable to sales impacts,” Honda said in a statement.
The company said, however, that the effect of auto tariffs would be smaller than previously expected.
The firm also predicted that currency will continue to fall, increasing its full-year operating profit estimate from 500 billion yen to 700 billion yen, a 200 billion yen, or 40 percent increase.
The Trump administration recently reduced reciprocal tariffs on Japanese goods to 15 percent, but it remains unclear when the new rate will be implemented.
Japan has pledged to boost investment in the US as part of a USD550 billion initiative under a trade deal, while the US will reduce its tariff on imported Japanese cars to 15 percent from 27.5 percent.
With autos a key pillar of Japan’s economy, prolonged higher tariffs could hurt major carmakers like Toyota and Honda, which rely heavily on the American market. (Anadolu)