Honda reports first annual loss; Chinese market sales decline for five consecutive years

Honda Motor Co. faces its first annual loss after listing.

On March 12, Honda said it expects an operating loss of 270 billion to 570 billion yen for fiscal year 2025 (from April 2025 to March 2026); it expects a net loss of 420 billion to 690 billion yen.

Previously, Honda’s operating performance had already suffered a sharp decline; as of the third fiscal quarter of 2025, Honda’s operating profit had shown year-on-year declines for the fourth consecutive quarter. However, at that time, Honda still kept its target of 550 billion yen in operating profit for fiscal year 2025, which differs greatly from the pre-loss figures this time.

On the same day, Honda also said it has canceled some plans to research, develop, manufacture, and sell electric vehicles in the U.S. market. Previously, Honda had been relatively aggressive in its electrification transition and had set a goal to fully switch to new-energy vehicles by 2040. But facing multiple pressures, such as changes in market demand and corporate transformation, Honda has had to significantly adjust its electrification strategy; it is understood that this move will bring Honda a cost loss of up to 2.5 trillion yen.

In addition to the difficulties facing its electrification transition, Honda is also struggling in the China market. In 2025, Honda sold 3.522 million vehicles worldwide, down 7.5% year over year. But in China, its full-year sales were only 645,000 units, down 24% year over year—already its fifth consecutive year of decline in China. (China Economic Net reporter Guo Yue)