What To Know
- In this International Business News report, analysts observed that the prolonged US-China trade conflict continues to exacerbate pressure on high-tech supply chains, particularly in the automotive sector.
- The company cited the US tariffs as a key driver of the downturn, costing approximately 97 billion yen.
International Business News: Automotive Giant Slashes Annual Forecasts
Honda Motor Co. has sharply reduced its full-year earnings forecast for the fiscal year ending March 2026, lowering projected consolidated net profit from 420 billion yen to 300 billion yen. The revision comes amid intensifying challenges from US-imposed tariffs and a persistent global semiconductor shortage disrupting production across multiple regions. The automaker also trimmed its operating profit outlook from 700 billion yen to 550 billion yen, reflecting deeper supply chain troubles and weakening international performance. In this International Business News report, analysts observed that the prolonged US-China trade conflict continues to exacerbate pressure on high-tech supply chains, particularly in the automotive sector.
Honda and Mazda brace for a turbulent fiscal year as tariffs and semiconductor shortages drive down profitability
Image Credit: Issei Kato/Reuters
Honda Vice President Noriya Kaihara told reporters that overseas factory operations are expected to return to normal between November 17 and 21. However, the damage from tariffs and chip shortages has already been significant. The company’s consolidated net profit for the first half of the fiscal year dropped 37 percent year-on-year to 311.8 billion yen, with 164.3 billion yen lost directly due to tariff measures. The semiconductor shortfall alone is estimated to have cost around 150 billion yen in potential earnings, underlining how vulnerable automakers remain to component shortages and trade policy shifts.
Mazda Also Feels the Heat of Tariff Turbulence
Mazda Motor Corp. is facing its own economic strain, reporting a net loss of 45.2 billion yen for the six months ending September 2025, compared with a profit of 35.3 billion yen in the same period last year. Sales declined 6.5 percent to 2,238.4 billion yen, and operating losses reached nearly 54 billion yen. The company cited the US tariffs as a key driver of the downturn, costing approximately 97 billion yen. With about 30 percent of its global sales tied to the American market and limited local manufacturing, Mazda remains heavily dependent on exports from Japan and Mexico. Overall global vehicle sales slipped by 3 percent, with modest growth in Japan offset by declines in Europe, China, and the United States.
Mazda Senior Managing Executive Officer Jeffrey Guyton described the current business climate as “exceptionally challenging,” pointing to ongoing tariff uncertainty as a major concern. Despite the difficulties, Mazda has decided to maintain its full-year forecasts for sales, operating profit, and net profit. Both Honda and Mazda’s situations highlight how fragile the global automotive industry remains when exposed to geopolitical friction and supply bottlenecks.
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