TOKYO – On Friday, Honda announced a significant drop in its profit for the first half of the fiscal year ending in September. The company’s earnings took a 37% hit compared to the previous year, largely due to the impact of tariffs imposed by former President Donald Trump, which overshadowed robust motorcycle sales.

The Japanese automaker, headquartered in Tokyo, reported a profit of 311.8 billion yen (approximately $2 billion) for the period from April to September. This marks a decline from the 494.6 billion yen it earned during the same timeframe last year.

Over these six months, Honda’s sales reached a total of 10.6 trillion yen (around $69 billion), reflecting a 1.5% decrease from the nearly 10.8 trillion yen recorded previously.

In light of these figures, Honda has revised its profit forecast for the fiscal year ending in March 2026, predicting a profit of 300 billion yen (about $2 billion). This would represent a 64% drop from the 835.8 billion yen achieved the prior year, and is a downward adjustment from its earlier projection of a 420 billion yen ($2.7 billion) profit for the year.

The manufacturer, renowned for models like the Accord sedan and Odyssey minivan, also attributed its financial challenges to unfavorable currency exchange rates. These shifts in currency value have resulted in a 116 billion yen (approximately $756 million) reduction in operating profit over the six-month period.

But Honda achieved record sales in motorcycles, led by strong results in the Asian region, excluding Vietnam. Honda said it sold more than 9 million motorcycles in Asia during the first half, up from 8.8 million a year ago. Honda’s motorcycle sales improved in every global region, except for Europe, at a record 10.7 million units sold.

Honda’s global vehicle sales in the first half totaled 1.68 million vehicles, down from 1.78 million. By region, vehicle sales grew in North America, but fell in Japan, the rest of Asia and Europe.

Although it helps that Honda produces many of its vehicles in the U.S., tariffs caused a decline of 164 billion yen ($1.1 billion) in operating profit over the six-month period, the company said.

Adding to its challenges, Honda has faced a chips shortage after the Dutch government in late September took control of Nexperia, which is based in the Netherlands but owned by Chinese company Wingtech Technology, citing national security concerns.

In response, China blocked shipments of chips from Nexperia’s plant in the southern Chinese city of Dongguan, though it has now allowed those exports to resume.

Vehicle production at Honda’s plant in Celaya, Mexico, has halted since Oct. 28, while production at North American plants were adjusted, starting Oct. 27, due to the Nexperia-related supply disruptions. Honda did not give a date on when production will be restored to normal levels.

Honda stocks on Friday gained 1.8% to 1,585 yen ($10) in Tokyo trading.

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Yuri Kageyama is on Threads: https://www.threads.com/@yurikageyama