Ever since its inception, Honda has been at the forefront of the automotive business. It has four-wheelers, two-wheelers, boat engines, and everything in between on sale. That too, with great success in terms of sales. The Tokyo-based factory even launched a rocket into space last year.
Dive deeper into the details, and you’ll realize Honda’s most successful business has been automobiles for several years. That means cars have brought in the most revenue, technically funding some of the other businesses in a way. In a dramatic turn of events, however, the latest fiscal year marked a drastic change in this trend.
Honda’s Automobile Business Just Lost Over $1 Billion
Honda’s automobile division has had millions in operating income year-on-year for decades. But in the first months of the latest fiscal year, that streak has finally broken. The Japanese giant has reported an operating loss of over $1 billion, marking a steep 9 percent drop in overall sales worldwide. North America, in particular, saw Honda Auto sales slashed by 60,000 units compared to FY24. As a result, the consolidated operating margin and profit were halved.
There Were A Few Reasons
What’s the explanation, you ask? Well, Honda highlights a couple of reasons, including new tariffs on imported vehicles and slow adoption of Honda EVs in the US. The brand also mentions ‘one-time EV-related expenses’ and ‘write-offs of development assets
for EV models due to lineup changes’. Talking numbers, the one-time expenses and tariffs resulted in Honda losing 267.1 billion Yen ($1.6 billion) and 279.5 billion Yen ($1.75 billion), respectively.
But Honda Motorcycles Were The Saving Grace
The profit was halved, yes, but Honda remained profitable even after all this. And that is where the motorcycle business did its thing. With an improvement in sales, the operating margin increased for the moto side of things. It contributed a total of 546.5 billion Yen ($3.43 billion), even with tariff and foreign currency impacts. The total operating profit was almost 9 percent, meanwhile.
While Honda bikes might not be as popular in the US, much of the driving force for the profit comes from Asia and South America. The former had 693,000 more two-wheeler sales in 2025 than in 2024, while the latter saw a rise of 300,000 units over 2024. These are serious numbers; serious enough to absorb the decline of the auto sector with ease. Among these continents, the Japanese giant says India and Brazil were the protagonists for two-wheeler sales.
Honda’s Motorcycles Might Soon Get Two-Tired Doing All The Heavy-Lifting
As good as that makes me feel as a two-wheeler fanatic, there’s no denying Honda two-wheelers can’t keep this up. After all, many of the two-wheelers in context cater to the budget-centric customer. So they cost less, with less profit margins and reliance mainly on volume. You should also know that motorcycle sales were down both in North America and Europe. Luckily, Honda believes the same and it is already expecting an upward swing in the auto sector next fiscal onwards.
Source: Honda Financial Report