Honda cuts annual outlook amid semiconductor supply worry and EV slowdown

Honda Motor Co Ltd reported a decline in half-year profit and the carmaker cut its outlook for the full-year.

Honda said attributable profit in the six months to September 30 fell 37% to JPY311.83 billion, around USD2.03 billion, from JPY494.68 billion a year prior.

Sales revenue declined 1.5% on-year to JPY10.633 trillion from JPY10.798 trillion.

Honda said growth in the electric vehicle market has slowed.

"Due to the slowdown in the expansion of the electric vehicle market in regions such as North America and Europe, Honda has been experiencing impacts including lower EV sales units and higher sales incentives per unit than initially expected," the Tokyo-based firm said.

"Furthermore, following the United States government policy shifts, including the abolition of tax incentives for EV purchases and the easing of emissions regulations, as well as the imposition of import tariffs, the growth of the EV market in the United States is expected to slow down even further. Due to the recent EV market slowdown, the Honda global EV sales ratio in 2030 is now expected to be 20%, lower than the previously announced target of 30%."

Looking ahead, Honda now expects annual sales of JPY20.700 trillion, down from its prior forecast of JPY21.100 trillion. Attributable profit of JPY300.00 billion is now expected, its outlook reduced from JPY420.00 billion.

The new guidance implies a 64% profit slump and a 4.6% sales fall.

"While depreciation of the yen is expected to have a positive impact on profit, we revised the forecast to reflect the anticipated decline in production volume caused by semiconductor supply shortage, as well as lower sales in the Automobile business," Honda said.

In the Automobiles arm alone, it cut its unit sales guidance to 3.34 million from 3.62 million "due to the decline in sales volume mainly in China and [Association of Southeast Asian Nations]", as well as semiconductor supply strife in North America.

Honda lifted its second quarter dividend to JPY35.00 per share from JPY34.00.