Recently, Japan's second-largest automaker, Honda, revised its annual profit forecast downward due to pressures from U.S. import tariffs, a global chip shortage, and chip supply issues from Nexperia, a Dutch semiconductor company (owned by China's Wingtech Technology and taken over by the Dutch government on September 30, 2025).
Honda expects to lose 385 billion yen from U.S. import tariffs, lower than the 450 billion yen initially estimated. Affected by this, Honda's stock fell 4.7% on Monday. A more significant challenge comes from Chinese electric vehicle manufacturers, whose market share in Southeast Asia is steadily rising, putting pressure on Japanese automakers like Honda.
In markets such as Thailand and Indonesia, Chinese automakers attract consumers with incentives and lower prices, compressing the profit margins of Japanese automakers. Honda has reduced its vehicle sales target for Asia (including China) for this fiscal year from 1.09 million units to 925,000 units, a drop of 10%. In Indonesia, Honda's market share fell from 11.6% last year to 8.9% this year.
To address these challenges, Japanese automakers are turning to the Indian market, where Chinese electric vehicles still face barriers to entry. Honda announced last month that it will make India a production and export base for one of its electric vehicle models.
Recently, Japan's second-largest automaker, Honda, revised its annual profit forecast downward due to pressures from U.S. import tariffs, a global chip shortage, and chip supply issues from Nexperia, a Dutch semiconductor company (owned by China's Wingtech Technology and taken over by the Dutch government on September 30, 2025).
Honda expects to lose 385 billion yen from U.S. import tariffs, lower than the 450 billion yen initially estimated. Affected by this, Honda's stock fell 4.7% on Monday. A more significant challenge comes from Chinese electric vehicle manufacturers, whose market share in Southeast Asia is steadily rising, putting pressure on Japanese automakers like Honda.
In markets such as Thailand and Indonesia, Chinese automakers attract consumers with incentives and lower prices, compressing the profit margins of Japanese automakers. Honda has reduced its vehicle sales target for Asia (including China) for this fiscal year from 1.09 million units to 925,000 units, a drop of 10%. In Indonesia, Honda's market share fell from 11.6% last year to 8.9% this year.
To address these challenges, Japanese automakers are turning to the Indian market, where Chinese electric vehicles still face barriers to entry. Honda announced last month that it will make India a production and export base for one of its electric vehicle models.