Honda President and CEO Toshihiro Mibe held a briefing that laid out the company’s recovery plan, which includes restructuring Honda’s business strategy, reallocating development and production resources to hybrid vehicles.
This is not the first time that Honda shared that it will lean heavily on hybrid vehicles to help the company regain the operating loss it has incurred due to its electric vehicle (EV) strategy. It has previously reported a massive operating loss of about P154.5 billion (around 400 billion yen) due to its revamped EV strategy. As such, Honda plans to recover from this setback by shifting its focus to developing hybrid vehicles, and is confident that the company will achieve record profits by 2029.
Honda said that it has decided to focus on hybrids rather than EVs due to the changes in the global market. Demands for EVs are not that high compared to hybrids, and this is why Honda wants to spend the next three years focusing on what the customers prefer, which is an efficient hybrid vehicle. The Japanese automaker said that it will “reallocate development and production resources to hybrid vehicles, which are currently in high demand.”
Honda will start its focus on hybrid vehicles by next year, which aligns with the previous timeline it set back in January when it debuted its new logo design. Starting in 2027, Honda shared that it will begin introducing next-generation hybrid models with revamped hybrid systems and platforms. The company added that it will then launch 15 new hybrid models globally by 2029.
As a sign of confidence, Honda unveiled two new prototypes, the Honda Hybrid Sedan and the Acura Hybrid SUV, which are said to be scheduled for global release within two years. The Japanese automaker said that these prototypes, which represent its next-gen hybrids, aim to cut production costs by up to 30 percent while improving fuel efficiency by 10 percent.
It will also continue the development of the next-generation Advanced Driver Assistance Systems (ADAS) as planned, with a target launch date of 2028. It will be installed in more than 15 hybrid vehicle models globally over the next five years.
Aside from leaning more on hybrid cars, Honda is also revamping its manufacturing processes. The company introduced a “triple-half” structure, which includes cutting development costs, time, and man-hours in half. To do this, Honda will make use of Artificial Intelligence (AI) and digital testing to streamline design and production preparation.
Of note, Honda will invest 1 trillion yen (around P390 billion) in software development and 4.4 trillion yen (P1.72 trillion) in internal combustion engines (ICE) and hybrid vehicles. This brings Honda’s resource investment over three years to 6.2 trillion yen (P2.42 trillion). With the revamped business strategy, Honda expects to hit a record operating profit of 1.4 trillion yen (about P546 billion) by the fiscal year ending in March 2029.
Autocar’s Take
Honda has once again announced that it is leaning on hybrid vehicles as the product that would allow its automobile business to recover from the operating losses it has recorded in fiscal year 2025. Honda decided to focus more on hybrid vehicles since this is the vehicle that has high global demand based on its internal data. As such, it took a step back when it comes to its EV development and production.
It will also implement reduced production costs so that the company can generate more profit. It will rely on AI and other digital systems to streamline design and production preparation.
