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Time of India
4 hours ago
- Automotive
- Time of India
Honda ‘working hard' to overtake Hero in Indian 2-wheeler arena
Honda Motor Company has once again reaffirmed its intent to overtake Hero MotoCorp in India's two-wheeler arena the fiscal. The Japanese automaker made this known at a recent Q&A session with analysts following its first quarter results in Japan. The transcript has been uploaded on the Honda website. 'We are working hard this term with the goal of surpassing Hero MotoCorp and becoming the best. There are some areas where we have deviated from the plan but we are on track. We will be introducing models to the market, so we will be working hard on this,' said Eiji Fujimura Director, Managing Executive Officer. Last year saw a rush of demand due to the impact of OBD2 regulatory changes, resulting in a significantly high Fujimura He added that the Q1 showing in India was weak compared to the same period last year in India. 'However, last year saw a rush of demand due to the impact of OBD2 regulatory changes, resulting in a significantly high figure.' Masao Kawaguchi Operating Executive, Head of Accounting and Finance Supervisory Unit, said that compared to last year, sales were about 180,000 units lower in India, but the operating profit margin had actually increased compared to the past and still in the double-digit ROS (return on sales) range. Vietnam, Brazil offset India drawback Vietnam and Brazil, contrast, 'have very high profit margins' which offset the decline in India. While acknowledging the risks of tariffs affecting the economies of each country in the future, 'we are confident that if India recovers steadily, countries such as Vietnam and Brazil will provide a boost, enabling us to achieve stable operating profit margins'. Will Honda finally fulfil its long-awaited desire of getting past Hero in the leadership tug-of-war? The company cannot be faulted for not trying but its former ally has still managed to stay comfortably ahead for over 15 years now even while the gap has been narrowing down in recent times. Also read:How Honda rebuilt its 2-wheeler brand in India after the Hero divorce Since the time it parted ways with Hero way back in 2010-11, Honda has been going flat out to increase capacity across its plants. The Indian arm, HMSI (Honda Motorcycle & Scooter India) started operations at a single plant in Manesar, Haryana, but over the years has expanded its presence to Rajasthan, Karnataka and Gujarat. Its total capacity is over six million units and could well cross the seven million mark in the next couple of years. Yet, the larger objective of not being able to get past Hero has been a constant source of angst for HMSI even while its leadership team has proclaimed on more than one occasion that it is only a matter of time before this is done. Perhaps, the company underestimated the strengths of Hero when it came to its huge retail network along with the twin jewels in its kitty — Splendor and Passion — which have kept its sales charts afire for many years now. Activa vs Splendor It is to HMSI's credit though that it has emerged the second largest player in India now and has even gone ahead of Hero in some months when its Activa scooter triumphed over Splendor. Other rivals like Bajaj Auto and TVS Motor have attempted in the past to overtake Hero but the might of Splendor was a little to difficult to take head-on. There were serious attempts made by Bajaj to reboot its Discover motorcycle in different avatars but Splendor eventually prevailed and it was finally a scooter, Honda Activa, which ended up being its closest rival and even taking the top spot on some occasions. The Splendor has a long history which has been appreciated by people in India. The product still remains Kawaguchi Following the split with Hero, a senior Honda official had told this writer that dislodging a brand like Splendor was not the main objective or scope of Honda's business in India. 'The more we sell in the current market, the more we will take customers from competitors. As a result, some OEM brand may see a reduction in market share or volumes. While respecting all competitors, we should create a healthy industry and market especially from the viewpoint of road safety,' he said. He was also quick to acknowledge that many Indian buyers 'think highly' of a reliable product or brand. 'The Splendor has a long history which has been appreciated by people in India. The product still remains good,' said the Honda senior official. Drawing more customers According to him, the sales performance of the Activa was 'far better' than Honda's expectations. 'Additional supply also helps create more and more customers. Today even in rural areas, the scooter segment boasts of high sales. This naturally accelerates demand for our scooter range,' he explained. Honda, continued the official, was still busy expanding capacity to meet the growing demand for scooters. 'I agree that the image of the brand is stronger in scooters than motorcycles. However, this will change over a longer time period,' he said. Also read:Honda targets two-wheeler leadership in India this fiscal It was also the official's view that motorcycles would remain the top preference for Indian customers. 'However, this situation may change after a decade. Year after year, the scooter is becoming more important in the market since it offers greater versatility when it comes to usage,' he elaborated. Since the time of this interview which happened some years ago, the two-wheeler terrain in India has changed quite a bit with electric now being an integral presence. It is here that legacy players like TVS Motor and Bajaj Auto are leading the race along with Ather and Ola following behind. Different ballgame with electric Hero has not replicated the success it has had in the ICE (internal combustion engine) space while Honda has been a late entrant and not quite made any sizable impact yet with its Activa-e: and QC 1 electric scooters. In the ICE arena, of course, it is firing on all cylinders and keen on overtaking Hero this fiscal. During the course of a press meet in Japan earlier this year, Honda officials had said the company would strive to become the leading player in India's electric two-wheeler market. It said it would sell its electric models in the price range where the cost of ownership for three years would be equivalent to that of ICE models. Also read:For honda, its time has 'finally come' to race past hero 'To achieve this target, Honda will begin operating a dedicated electric motorcycle production plant in India in 2028. A wide variety of electric models will be produced by combining modules that are common for multiple models. Additionally, for batteries, Honda has been working with manufacturers to establish specifications suited to the characteristics of two-wheeler and ensure stable procurement,' said the company representatives. Specifically on India, Honda said it would pursue various initiatives to strengthen its business including the automation of production plants and active cultivation and utilisation of local suppliers. In addition, it planned to implement efficient product strategies globally, such as exporting high-value, highly-competitive products nurtured in India to the South American market where customer needs are similar. India as global hub 'Honda is expecting to see a further increase of motorcycle demand also in ASEAN countries, Pakistan, Bangladesh and Brazil due to an increase in the working population that overlaps with the motorcycle user population. Seizing this opportunity, Honda will further solidify its motorcycle business by fully leveraging its strengths in products as well as sales, service, procurement and production operations on a global basis,' said its leadership team at the meeting in Japan. Interestingly, neither TVS Motor nor Bajaj Auto seems as obsessed any longer with the leadership stakes in India which has pretty much boiled down to a tug-of-war between Hero and Honda. Bajaj, over the years, has been paying more attention to its global ambitions where partnerships with KTM and Triumph are playing a key role in exploring new geographies. In addition, its own motorcycles and three-wheelers are being shipped out worldwide. TVS Motor, likewise, has been on a global trail with brands like BMW Motorrad and Norton fuelling the cause. It also has successful homegrown brands like Jupiter and Apache which are also doing well in India and other countries. TVS has also been among the first to pick up the electric vehicle gauntlet where it is the leading player this fiscal.
Gizmodo
a day ago
- Automotive
- Gizmodo
Honda Is Giving Up on the All-Electric Dream
Honda just dealt a huge blow to the all-electric dream. In a stunning reversal, the Japanese auto giant has announced it is rethinking its electrification strategy, signaling that battery-electric vehicles (BEVs) are no longer the holy grail of its future. The move is a major setback for the EV industry, which is already reeling from the September 30 expiration of federal tax credits that made electric cars competitive with their gas-powered counterparts. For years, the auto industry, mesmerized by the success of Tesla, has been in an arms race to go all-electric. Now, one of its biggest players is pumping the brakes. Hard. 'BEVs are not the goal, better electric vehicles are a pathway to achieving carbon neutral, not necessarily the only pathway,' Honda Australia president and CEO, Jay Joseph, recently told the publication Drive. 'BEVs will continue to improve, we're working on solid-state batteries, but our goal is carbon neutral, not battery electric vehicles.' His statement confirms a dramatic strategic shift that Honda executives laid out during an August 6 press conference. They are no longer betting the farm on an all-electric future. The reason for the pivot is simple: Honda's EV strategy has been a financial nightmare. During the press conference, Honda Managing Executive Officer Eiji Fujimura admitted that they are 'not very optimistic' about the EV market, citing the impact of the expiring Inflation Reduction Act (IRA) tax credits and a general 'cooling down of the market.' The company is 'struggling with the sales of EV this year series,' Fujimura said, and needs to 'expedite actions' to meet consumer expectations. The financial results tell the real story. Honda's latest quarter was hammered by a one-time charge of 113.4 billion yen ($780 million) directly linked to its EV business. This included losses on EVs sold in the United States and a massive write-off of assets for EV models the company is now scrapping from its future lineup. The company now expects its full-year EV-related expenses to hit a staggering 650 billion yen ($4.47 billion). Honda currently sells two EV models in the U.S., the Honda Prologue and the Acura ZDX. To sell them, the company has been forced to offer massive incentives. According to industry data from Motor Intelligence cited by Automotive News, Honda spent an average of more than $12,000 in promotions on each Prologue and an eye-watering $21,000 on each ZDX it sold last quarter. Even with these huge discounts, the company's market share has declined. These struggles are compounded by the expiration of the $7,500 federal tax credit for new EVs, a subsidy that helped convince many consumers to make the costly switch. Without it, the high sticker price of EVs and the lack of reliable charging infrastructure in many parts of the country become even bigger obstacles. Faced with this brutal reality, Honda is turning to a strategy that, until recently, was mocked by EV purists. To achieve its carbon neutrality goals, the company will now lean heavily on hybrid vehicles, joining Toyota, whose cautious, hybrid-first approach was seen as outdated just a few years ago. Now, it looks prescient. A recent report from GlobalData indicated that between 2025 and 2035, virtually every popular Honda model in America would be offered as a hybrid. 'I think at some point we're going to be all-hybrid, all-electrified, but this is just another step in that particular transition,' Joseph confirmed to Drive. Honda is also exploring hydrogen-powered Fuel Cell Electric Vehicles (FCEVs), which convert hydrogen into electricity onboard. While FCEVs face their own infrastructure and cost challenges, they produce only water vapor as emissions. Just a few years ago, BEVs were the industry's obsession and the clear symbol of the race to decarbonize. Now, Honda's retreat marks a new reality: the path to carbon neutrality is looking more complicated, and the BEV-only strategy is no longer sacred. Honda's move doesn't just affect its own lineup. It sends a warning signal across the auto industry that the EV growth story is hitting limits. If one of the world's largest automakers is hedging its bets, other companies might follow, slowing the shift away from fossil fuels at a critical moment for climate goals.
Auto Blog
a day ago
- Automotive
- Auto Blog
Honda Shifts Gears on EVs Amid Flattening Demand and Tariff Concerns
By signing up I agree to the Terms of Use and acknowledge that I have read the Privacy Policy . You may unsubscribe from email communication at anytime. Both come from rich backgrounds of off-road capability and passenger comfort. Has modern technology helped or hurt either SUV's credibility? I've driven both, and I have some thoughts. View post: Walmart's $240 Rolling Tool Chest Is Now 42% Off, and It's the 'Perfect Size' The 2025 Hyundai Kona is one of the best subcompact crossovers in the industry. The August lease deal's low monthly price makes the Kona a very attractive option for shoppers. The 'Power of Dreams' brand is reconsidering its course of action Japanese automotive giant Honda is reassessing its strategy for electric vehicles as it navigates challenges stemming from the high costs of EV development, flattening EV demand, and the impact of U.S. tariffs. In the first quarter of its 2025-2026 fiscal year (April 1 to June 30, 2025), Honda took a one-time charge of ¥113.4 billion (~$780 million) related to its EV-related troubles. In total, the impact of the EV charge and its exposure to tariffs took a toll on Honda's operating profit during the quarter, as earnings fell to ¥244.1 billion (~$1.69 billion) from ¥484.7 billion (~$3.35 billion) just one year ago. 2025 Honda Accord: 4 reasons to love it, 2 reasons to think twice Watch More During a press conference on August 6, Tokyo time, Honda Managing Executive Officer Eiji Fujimura attributed the nearly $780 million charge regarding EVs to its mistakes, adding that they aren't 'optimistic' about the future of electric vehicles. Honda is struggling to sell EVs profitably Although Honda still plans to launch its 0 Series line of EVs in the U.S. in 2026, the company has delayed product development and investment in a Canadian EV production hub. However, it struggles to come to terms with the loss of the U.S. federal tax credit incentive and the cooling growth in EV demand. Currently, Honda sells two EVs in the States, the GM Ultium-based Honda Prologue and Acura ZDX crossovers, which, so far, have had admittedly healthy sales numbers. Through June, American Honda moved 16,317 Prologues, while Acura sold 10,335 ZDX; numbers that were only possible with heavy incentives. By providing your email address, you agree that it may be used pursuant to Arena Group's Privacy Policy. We may receive compensation. According to industry marketing promotion data from Motor Intelligence cited by Automotive News, Honda spent an average of more than $12,000 on each Prologue and $21,000 on each ZDX it moved during the April-June quarter. In addition, Honda's attempts to break into the mecha-competitive Chinese EV market with its line of locally developed EVs have not been a fruitful experiment for the automaker. In remarks, Fujimura noted that Honda's Chinese-market EVs were too expensive amidst a sea of local brands competing in local price wars, and that their cars lacked important connected car technology features that Chinese consumers found on less costly models. 'We are struggling with EVs there,' he said. 'We are underachieving against the initial plan.' Source: Getty Images Trump Admin.—Japan trade deal saved $1.38B from Honda's tariff outlook In addition to its EV woes, U.S. tariffs are taking a significant toll on the Power of Dreams brand's finances. However, Honda officials believe that the recent trade deal between the Japanese government and the Trump Administration in the U.S., which reduced tariffs on automobiles and auto parts from 25% to 15%, will have a slight positive impact on its financial performance in the foreseeable future. Previously, the automaker projected that tariffs would hurdle a full fiscal year blow of ¥650.0 billion ($4.49 billion) at a minimum; however, its latest outlook shows that the new policy would save ¥200 billion ($1.38 billion), down to ¥450.0 billion ($3.11 billion). Autoblog Newsletter Autoblog brings you car news; expert reviews and exciting pictures and video. Research and compare vehicles, too. Sign up or sign in with Google Facebook Microsoft Apple By signing up I agree to the Terms of Use and acknowledge that I have read the Privacy Policy . You may unsubscribe from email communication at anytime. However, to further mitigate the impact of U.S. tariffs, Honda says it will increase prices and adjust its supply chain to produce more domestic vehicles for the U.S. market. Fujimura hinted that the automaker may expand its two-shift operation at U.S. plants to three to keep up with demand, requiring more coordination with suppliers. 'We might change it to a three-shift operation in the States, so that we can increase production volume without spending too much on capital investment,' Fujimura said. Final thoughts Notably, Honda remains vulnerable to potential trade issues with Mexico and Canada, as a formal agreement with these countries has not yet been finalized. For the full fiscal year to March 31, 2026, Honda estimates that it will incur approximately ¥190 billion ($1.31 billion) in tariff costs on complete vehicles imported to the U.S., with the majority of this amount coming from the USMCA nations. Honda sources a third of its vehicles from tariff-targeted Mexico and Canada, including popular models such as the compact HR-V crossover, the Acura ZDX, and Honda Prologue EVs from GM's Ramos Arizpe plant, as well as select units of the Civic and CR-V from Alliston, Ontario. About the Author James Ochoa View Profile
2 days ago
- Automotive
Honda Raises Earnings Forecast on Smaller U.S. Tariff Impact
News from Japan Aug 7, 2025 17:21 (JST) Tokyo, Aug. 7 (Jiji Press)--Honda Motor Co. has revised up its group earnings forecast for fiscal 2025, expecting a smaller impact from U.S. auto tariffs following a trade agreement reached between Tokyo and Washington last month. For the year through next March, the major Japanese automaker on Wednesday raised its net profit forecast from 250 billion yen to 420 billion yen, still down 49.8 pct from the previous year. Honda raised its sales forecast to 21.1 trillion yen from 20.3 trillion yen and its operating profit projection to 700 billion yen from 500 billion yen. The company now expects the U.S. tariffs to lower its operating profit by 450 billion yen, against its previous projection of 650 billion yen. It kept its global automobile sales forecast unchanged at about 3.62 million units. Honda Managing Executive Officer Eiji Fujimura told a press conference that the company will address high U.S. tariffs by expanding production in the United States, including by increasing the operating rate of its U.S. plants. [Copyright The Jiji Press, Ltd.] Jiji Press
Yahoo
2 days ago
- Automotive
- Yahoo
Honda Shifts Gears on EVs Following Massive Quarterly Loss
Honda Shifts Gears on EVs Following Massive Quarterly Loss originally appeared on Autoblog. The 'Power of Dreams' brand is taking a massive loss Japanese automotive giant Honda is rethinking its strategy regarding electric vehicles as it absorbed red-ink losses stemming from their development and the impact of U.S. tariffs. In the first quarter of its 2025-2026 fiscal year (April 1 to June 30, 2025), Honda took a one-time charge of ¥113.4 billion (~$780 million) related to its EV-related troubles. In total, the impact of the EV charge and its exposure to tariffs took a toll on Honda's operating profit during the quarter, as earnings fell to ¥244.1 billion (~$1.69 billion) from ¥484.7 billion (~$3.35 billion) just one year ago. During a press conference on August 6, Tokyo time, Honda Managing Executive Officer Eiji Fujimura attributed the nearly $780 million charge regarding EVs to its mistakes, adding that they aren't "optimistic" about the future of electric vehicles. View the 2 images of this gallery on the original article Honda is struggling to sell EVs profitably Although Honda still plans to launch its 0 Series line of EVs in the U.S. in 2026, the company has delayed product development and investment in a Canadian EV production hub. However, it struggles to come to terms with the loss of the U.S. federal tax credit incentive and the cooling growth in EV demand. Currently, Honda sells two EVs in the States, the GM Ultium-based Honda Prologue and Acura ZDX crossovers, which have had healthy sales numbers. Through June, American Honda moved 16,317 Prologues, while Acura sold 10,335 ZDX; numbers that were only possible with heavy incentives. According to industry marketing promotion data from Motor Intelligence cited by Automotive News, Honda spent an average of more than $12,000 on each Prologue and $21,000 on each ZDX it moved during the April-June quarter. In addition, Honda's attempts to break into the mecha-competitive Chinese EV market with its line of locally developed EVs have not been a fruitful experiment for the automaker. In remarks, Fujimura noted that Honda's Chinese-market EVs were too expensive amidst a sea of local brands competing in local price wars, and that their cars lacked important connected car technology features that Chinese consumers found on less costly models. 'We are struggling with EVs there,' he said. 'We are underachieving against the initial plan.' Trump Admin.—Japan trade deal saved $1.38B from Honda's tariff outlook In addition to its EV woes, U.S. tariffs are making a significant dent in the Power of Dreams brand's pocketbook, as Honda took a ¥124.6 billion (~$861.6 million) operating profit loss from U.S. tariffs during the last fiscal quarter. However, Honda officials believe that the recent trade deal between the Japanese government and the Trump Administration in the U.S., which reduced tariffs on automobiles and auto parts from 25% to 15%, will have a slight positive impact on its financial performance in the foreseeable future. Previously, the automaker projected that tariffs would hurdle a full fiscal year blow of ¥650.0 billion ($4.49 billion) at a minimum; however, its latest outlook shows that the new policy would save ¥200 billion ($1.38 billion), down to ¥450.0 billion ($3.11 billion). However, to further mitigate the impact of U.S. tariffs, Honda says it will increase prices and adjust its supply chain to produce more domestic vehicles for the U.S. market. Fujimura hinted that the automaker may expand its two-shift operation at U.S. plants to three to keep up with demand, requiring more coordination with suppliers. 'We might change it to a three-shift operation in the States, so that we can increase production volume without spending too much on capital investment,' Fujimura said. Final Thoughts Despite this, one thing to note is that Honda remains exposed to potential trade issues with Mexico and Canada, as a formal agreement with the respective countries has not been finalized. For the full fiscal year to March 31, 2026, Honda estimates it will incur ¥190 billion ($1.31 billion) in tariff costs on complete vehicles imported to the U.S., with the most significant chunk coming from the USMCA nations. Honda sources a third of its vehicles from tariff-targeted Mexico and Canada, including popular models such as the compact HR-V crossover, the Acura ZDX, and Honda Prologue EVs from GM's Ramos Arizpe plant, as well as select units of the Civic and CR-V from Alliston, Ontario. Honda Shifts Gears on EVs Following Massive Quarterly Loss first appeared on Autoblog on Aug 6, 2025 This story was originally reported by Autoblog on Aug 6, 2025, where it first appeared.
