Honda flags operating loss of as much as US$3.6 billion this fiscal year

[TOKYO] Honda Motor on Thursday (Mar 12) said it may book an operating loss of as much as US$3.6 billion for the financial year ending this month due to mounting costs related to its electric vehicle strategy.

The Japanese automaker slashed its forecast to a loss of 270 billion yen to 570 billion yen (S$2.16 billion to S$4.57 billion) from 550 billion yen profit, and cancelled development and launches of some US-made EVs given slowdown in the North America EV market.

Honda expects to incur as much as 2.5 trillion yen in expenses and losses over multiple financial years due to strategy shift.

It also lowered its net profit forecast range for this financial year to a loss of 420 billion yen to 690 billion yen, versus profit of 300 billion yen expected previously.

The automaker said it aimed to introduce next-generation hybrid models and enhance its current hybrid lineup to improve profitability.

CEO Toshihiro Mibe and Executive Vice President Noriya Kaihara will voluntarily forego the equivalent of 30% of their compensation for three months while some other executives will forego 20%, the automaker said in its statement.

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Honda reports more than 60% drop in third-quarter operating profit

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Honda plans to announce a revamped mid-to-long-term business strategy in the next fiscal year. REUTERS