Honda Motor is set to report an operating loss of about Y400bn ($2.55bn) for the fiscal year ended March 2026, marking the company’s first operating loss since its public listing in 1957, Nikkei Asia reported.
The projected result represents a significant decline from the Y1.2tn operating profit recorded in the previous financial year.
Honda’s expected performance remains within the range outlined in March, when the company projected an operating loss of between Y270bn and Y570bn for the fiscal year.
The setback follows Honda’s decision earlier this year to revise its electrification plans and cancel three planned electric vehicle models – the Honda 0 SUV, Honda 0 sedan and Acura RSX – citing weaker-than-expected EV demand in North America.
The company estimated that expenses and losses linked to the restructuring could total as much as Y2.5tn over the two financial years from April 2025 to March 2027.
These costs include impairment charges tied to halted EV development and production programmes, along with compensation payments to suppliers.
Despite the anticipated loss, Honda aims to return to operating profitability in the financial year ending March 2027.
The company expects support from continued motorcycle sales growth, particularly in Asian markets, as well as favourable currency conditions stemming from a weaker yen.
Honda is due to announce its full-year earnings and management strategy on 14 May.
The company is expected to detail recovery measures for its North American and Chinese operations, alongside expansion plans for its business in India.
The loss would rank among the largest reported by a major Japanese carmaker, following Toyota’s Y461bn operating loss during the 2008–09 global financial crisis, although comparisons are affected by differing accounting standards.
Last month, Honda also confirmed plans to exit South Korea’s passenger vehicle market this year following a sharp decline in sales.
The company said it would stop selling passenger vehicles in the country by the end of the year while maintaining motorcycle operations.
Honda’s wholly owned distributor in Seoul was established in 2001 as Honda Motorcycle Korea Company before changing its name to Honda Korea Company in 2004 after entering the passenger vehicle market.
