Honda posts its first annual loss in 70 years
Honda has reported its first annual loss in 70 years and stepped back from its target of producing only electric vehicles by 2040. The carmaker pointed to a sharp drop in Chinese sales and a supply shock from the Iran war as the main drivers. Management will put more weight on hybrid models in its line-up.
Honda has reported its first annual loss in 70 years and formally walked back its target of selling only electric vehicles by 2040. The company said it ended the past fiscal year with a net loss of around 130 billion yen. The biggest wounds came from the rise of local rivals in China and supply disruptions linked to the Iran war.
The automaker will invest again in its hybrid line-up and stretch the life of models in North America and Europe in particular. Designs for fully electric models will stay on the drawing board, but launch dates have been pushed back by years. The new chief executive said the research and development budget will be protected to avoid losing core skills during the transition.
Investors took the loss badly and the share price fell almost six per cent in Tokyo. Analysts highlighted Toyota's longstanding hybrid bet as a pressure point on Honda's management. The company described its outlook for the coming fiscal year as 'cautiously optimistic'.
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