Intensifying competition in Southeast Asia, particularly from Chinese automakers, has forced local players to offer higher incentives and price cuts, Honda’s Noriya Kaihara said.Honda Motor Co. on Friday slashed its full-year profit forecast by 21 per cent, citing one-time electric vehicle (EV) costs, declining sales in China and other Asian markets, and a parts shortage caused by supply issues with Nexperia chips.
According to a report by Reuters, Japan’s second-largest automaker now expects an operating profit of 550 billion yen ($3.65 billion) for the fiscal year ending March 2026, down from its earlier projection of 700 billion yen.
For the first half of FY26, Honda’s automobile division reported an operating loss, driven largely by 224 billion yen in one-time expenses linked to its EV business. The company has also scaled back its 2030 global EV sales ratio target to 20 per cent, compared with the 30 per cent projected earlier.
The company expects to sell 925,000 vehicles in Asia, including China, in FY26 — significantly lower than its previous forecast of 1.09 million units.
Intensifying competition in Southeast Asia, particularly from Chinese automakers, has forced local players to offer higher incentives and price cuts, Honda’s Executive Vice President Noriya Kaihara said.
“We recognise that a fundamental review is necessary for Asia,” Kaihara stated. “However, from this fiscal year through the next, there’ll be no particularly new models.”
For the July–September quarter, Honda reported an operating profit of 194 billion yen, a 25 per cent decline year-on-year, compared with 257.9 billion yen in the same period last year and below analysts’ expectations of 212.1 billion yen, according to LSEG data.
