Japanese automaker Honda Motor Co. has delivered a stunning first-quarter fiscal result, with net profits more than doubling year-over-year, marking a sharp milestone in the company’s effort to rebound from its first full-year operating loss in corporate history. The Tokyo-based manufacturer announced Wednesday that net income for the April-June quarter reached 456.9 billion Japanese yen, equivalent to approximately $2.9 billion, jumping from 196.6 billion yen recorded in the same three-month period last year.
Quarterly total revenue also climbed 13.5% year-over-year to hit 6.06 trillion yen, or $38 billion, driven by strong consumer demand for Honda’s passenger vehicles in the U.S. and Indian markets. The company, which produces models ranging from the popular Accord sedan and Fit subcompact car to the iconic Super Cub motorcycle, saw particularly robust gains in its two-wheeler segment, with motorcycle sales surging across Brazil and India to deliver outsized profitability. Automobile sales grew steadily in Honda’s home market of Japan and the U.S., but continued to face headwinds in the world’s largest passenger vehicle market, China.
Honda’s recent turnaround effort follows a difficult full fiscal year ending in March 2024, when the company posted a net loss of 423.9 billion yen ($2.7 billion). At the time, the automaker attributed the underperformance to massive unplanned costs tied to overly ambitious electric vehicle development plans that failed to meet original targets. Company leadership also cited policy shifts from the former Trump administration as a key external headwind: the Trump administration rolled back federal EV incentive programs, paused funding for state-level EV charging infrastructure expansion amid soaring global gas prices driven by the conflict in Iran, and implemented steep 25% tariffs (later lowered to 15%) on imported automobiles and auto parts, which eroded Honda’s export margins. After discovering slower-than-expected consumer adoption of fully electric vehicles, Honda has scaled back many of its planned EV model launches to refocus on segments with stronger current demand.
To address its ongoing sales challenges in China, Honda Chief Financial Officer Masao Kawaguchi told reporters that the company is adjusting its product lineup to align with the unique preferences of Chinese consumers, which differ significantly from buyer tastes in North America and other Asian markets. Kawaguchi noted that full strategic adjustments will require one to two more years of focused investment and localization, adding that Honda will fully redirect dedicated resources to the Chinese market to drive a rebound.
A favorable foreign exchange environment also provided a major boost to Honda’s first-quarter results. A weaker yen against the U.S. dollar throughout the quarter translated into higher yen-denominated earnings for Honda’s overseas sales, a longstanding advantage for Japanese export-focused manufacturers. While recent joint U.S.-Japan currency intervention has lifted the yen’s value slightly, the currency’s average depreciation over the past 12 months still delivered significant bottom-line gains for the quarter, according to Kawaguchi, who described the overall first-quarter performance as “very healthy.”
Buoyed by the strong start to the fiscal year, Honda has upgraded its full-year net profit forecast from 260 billion yen ($1.6 billion) to 400 billion yen ($2.5 billion), projecting a full return to annual profitability after last year’s loss.
Looking ahead, the company is facing a new short-term disruption following the magnitude 7.1 earthquake that struck Kumamoto, southwestern Japan, last week. Like other major Japanese automakers with production facilities in the region, Honda temporarily suspended operations at some plants and saw minor supply chain interruptions. Honda is scheduled to enter its annual company-wide summer break later this month, and company officials stated they expect production and logistics to return to normal once operations resume after the break. The full financial impact of the earthquake on full-year production volumes remains under assessment.
Investors reacted positively to the strong earnings report, driving Honda’s share price up 3.9% in Tokyo trading following the results announcement.