Honda Motor Co. Chief Executive Officer (CEO) Toshihiro Mibe apologized to the company’s shareholders, as the brand is currently in deep waters after reporting its first annual financial loss in nearly 70 years.
Honda’s poor financial performance is mainly caused by two factors. The first is its restructuring costs due to its decision to take a step back when it comes to developing electric vehicles. The company has also reported a massive operating loss of about P155 billion (around 400 billion yen) because of its revamped EV strategy.
The Japanese automaker previously announced that it will shift its focus to developing hybrid vehicles due to weakening global demand for EVs, including the United States, a market that Honda projected to be one of its strongest when it comes to EVs. However, the lower demand coupled with changing trade conditions made things complicated for Honda’s EV strategy, which is why it announced that it will lean on developing hybrid vehicles instead.
Mibe shared that if Honda continues to implement its original EV strategy, it would mean more financial loss moving forward, and it would put Honda in a more difficult situation. 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, a statement that was given by the company last May 2026.
Aside from the revamped EV strategy, Honda’s first annual financial loss in seven decades is the result of its weakening sales performance in the Chinese market. Reuters reports that former Honda executives have criticised Mibe for neglecting China.
With the red marks on its sales sheet, Honda CEO Mibe apologized for the company’s historic annual loss in nearly 70 years.
“I would like to express my deepest apologies to our shareholders for the significant concern and inconvenience caused by the net loss recorded in the previous fiscal year’s financial results,” Mibe told shareholders, as reported by Reuters.
Other than giving updates about the company’s financial situation, Mibe hinted that Honda is teaming up with Nissan. The first dance between the two Japanese companies did not turn out well. Despite this, Honda’s Mibe reportedly shared that the company is open to taking a second shot. After all, it takes two to tango, right?
Autocar’s Take
Honda CEO Toshihiro Mibe’s recent apology to the company’s shareholders shows that Honda is currently not in its best form when it comes to its finances. Well, this is an obvious fact as the company reported its first annual financial loss in 70 years. Honda’s revamped EV strategy has proven to be very costly, putting the brand in a difficult position.
Honda’s poor annual financial performance is also attributed to its weakening presence in China. Speaking of which, new energy vehicles in China are gaining traction, including in the local market, due to their feature-packed vehicles.
