Japan's Top Seven Automakers Forecast Near-Halving of Profits for FY2026 Amid Collective Earnings Decline

Honda, Nissan, and Toyota have recently released their financial results for fiscal year 2025. Honda reported its first annual loss in nearly 70 years since going public, with a net loss of ¥414.3 billion. Nissan posted a net loss of ¥533.1 billion for FY2025, marking its second consecutive year of losses. Toyota remained profitable but saw its net profit decline by approximately 20% year-over-year to ¥3.85 trillion. Japan’s automotive sector as a whole is facing profitability pressures due to geopolitical conflicts, tariff pressures, and supply chain risks. The seven major Japanese automakers—Toyota, Honda, Nissan, Suzuki, Mazda, Subaru, and Mitsubishi—are collectively forecasting a net profit of ¥3.9 trillion for fiscal year 2026 (April 2026–March 2027), a 48% drop from the record high of ¥7.54 trillion achieved in FY2023. Additionally, escalating tensions in the Middle East have disrupted shipping through the Strait of Hormuz, driving up global energy and raw material prices and further squeezing corporate profit margins. Nissan has already launched a business restructuring plan, which includes cutting 20,000 jobs globally and closing seven factories.