Honda Motor Co., one of Japan’s automotive giants, has reported a sharp decline in profits for the first half of its 2025 fiscal year, underscoring the mounting pressures facing global carmakers in an era of tariffs, currency headwinds, and supply chain disruptions. According to multiple reports, including the Associated Press and Transport Topics, Honda’s profit for the six months through September 2025 fell by a staggering 37% compared to the previous year. The company posted a profit of 311.8 billion yen, or roughly $2 billion, down from 494.6 billion yen a year earlier.
While such numbers might seem abstract, the impact is very real for Honda’s bottom line. Sales for the period totaled 10.6 trillion yen ($69 billion), representing a 1.5% dip from the previous year’s nearly 10.8 trillion yen. That’s a significant drop for a company of Honda’s scale, and it’s not just a blip—Honda has revised its full-year profit forecast sharply downward. The automaker now expects to earn just 300 billion yen ($2 billion) for the fiscal year ending March 2026, a sobering 64% plunge from last year’s 835.8 billion yen, and a notable reduction from its earlier estimate of 420 billion yen ($2.7 billion).
So, what’s behind these numbers? The answer is a complex mix of global economic forces, political decisions, and shifting consumer demand. One of the most immediate culprits is the set of tariffs imposed by former President Donald Trump. According to AP, these tariffs have taken a direct toll on Honda’s operating profit, shaving off $1.1 billion (164 billion yen) in just six months. While Honda has long benefited from manufacturing many of its vehicles in the U.S., these tariffs have nonetheless cut deep.
But tariffs aren’t the only headache. Currency fluctuations have also played a major role. Honda reported that an unfavorable exchange rate wiped out 116 billion yen ($756 million) from its operating profit over the same period. For a global exporter like Honda, even small shifts in currency can have outsize effects—think of it as a gust of wind that can tip a carefully balanced scale.
Despite these setbacks, there’s a silver lining: Honda’s motorcycle business is positively roaring. The company achieved record sales in this segment, particularly in Asia. During the first half of 2025, Honda sold more than 9 million motorcycles across Asia, up from 8.8 million in the previous year. Globally, the company moved a record 10.7 million motorcycles, with improved sales in every region except Europe. It’s a testament to the enduring appeal of two-wheeled transport in fast-growing markets, and perhaps a sign that while four-wheeled vehicle sales are slowing, demand for motorcycles remains robust.
On the automotive side, however, the news is less rosy. Honda’s global vehicle sales for the first half of 2025 totaled 1.68 million units, down from 1.78 million the previous year. The regional breakdown tells its own story: vehicle sales grew in North America, but fell in Japan, the rest of Asia, and Europe. This uneven performance highlights the challenges facing automakers as they try to balance shifting consumer preferences and navigate regional economic uncertainties.
Adding to Honda’s woes is a problem that has become all too familiar in recent years: supply chain disruptions. In late September 2025, the Dutch government took control of Nexperia, a Netherlands-based but Chinese-owned chipmaker, citing national security concerns. In response, China blocked shipments of chips from Nexperia’s plant in Dongguan, a move that rippled across the global auto industry. Although exports from the plant have since resumed, the temporary blockade caused immediate pain for Honda. Production at its Celaya, Mexico plant has been halted since October 28, 2025, and adjustments were made at North American plants starting October 27 due to the chip shortage. As of now, Honda has not provided a timeline for when production will return to normal.
These chip shortages are no small matter. Modern vehicles rely on semiconductors for everything from engine management to infotainment systems. When the supply dries up, so does production—leaving factories idle and dealers with fewer cars to sell. It’s a stark reminder of how interconnected the world’s supply chains have become, and how a decision in one country can reverberate globally.
Yet, in the midst of these challenges, Honda’s stock showed a glimmer of resilience. On November 7, 2025, Honda shares rose 1.8% to 1,585 yen ($10) in Tokyo trading, according to Transport Topics. Perhaps investors are betting that the company’s strengths—like its booming motorcycle division and its ability to adapt production—will help it weather the storm.
Honda’s story is, in many ways, emblematic of the broader automotive industry in 2025. Tariffs, currency swings, and supply chain hiccups are not unique to Honda; they’re part of a global pattern that’s forcing automakers to rethink their strategies. Some industry analysts have noted that while Honda’s production in the U.S. helps limit the damage from tariffs, the company cannot completely insulate itself from the broader economic environment.
Honda, known for popular models like the Accord sedan and Odyssey minivan, has long been considered a bellwether for the industry. Its recent struggles suggest that even the most established players are vulnerable in a rapidly changing world. The company’s decision to lower its profit forecast by such a wide margin is a clear signal that management expects tough times ahead.
Looking forward, Honda will likely continue to lean on its strengths in the motorcycle market, particularly in Asia, while working to resolve production bottlenecks and adjust to the new realities of global trade. The company’s ability to adapt—whether by shifting manufacturing, investing in new technologies, or finding new markets—will be crucial in determining its future success.
For now, though, the numbers don’t lie. Honda is facing a challenging road, with profits down sharply and uncertainty looming over its vehicle production. Still, if history is any guide, this storied automaker has weathered storms before—and with its global reach and diversified product line, it may yet find a way to steer back onto a more profitable path.
