Toyota and Honda forecast profit and sales short of analysts’ estimates as a trade spat between the US and China threatens global car sales already sputtering from weaker demand.
Both reported results that underscore the challenges faced by carmakers across the globe, from having to invest in electrification and self-driving cars, to struggles with tariffs on both sides of the Pacific Ocean and changing consumer tastes.
Takahiro Hachigo, Honda’s chief executive, gave a speech to set a new strategic direction for the company, citing “abrupt changes in the global business environment surrounding the automobile industry”.
By 2025, Honda will cut production costs by 10% and reduce the number of variations for global car models to a third of the current number, he pledged.
“We will realise our goals with a keen sense of speed,” Mr Hachigo said.
Honda and Toyota’s results come two weeks after Nissan said it was set to miss its full-year profit goal.
The Japanese car maker, which has been struggling to reignite earnings and sales while dealing with the fallout from the arrest of former chairman Carlos Ghosn, slashed its operating-profit forecast for the year ended March for the second time.
Nissan will report final results on May 14.
Although Toyota became the first publicly traded Japanese company to report annual sales of more than 30 trillion yen (€243bn) and unveiled plans to buy back as much as 300bn yen of its shares, the stock failed to erase losses and closed down about 1% in Tokyo trading. Honda reported after the market close.
In response to US President Donald Trump’s threats to raise tariffs on cars and auto parts, Toyota has stepped up investments in the US.
The company added about €2.7bn to a multiyear plan, with the car maker now planning to invest almost €11.5bn over a five-year period ending in 2021.
Mr Trump said in late April that Japanese Prime Minister Shinzo Abe, who had visited him last month, agreed to put “$40bn into the United States for new car factories”.
Toyota is planning to boost China sales by 8.5% to 1.6 million units in 2019 and approved this week a €1.6bn investment to expand one of its Chinese joint ventures’ new-energy vehicle capacity by 400,000 units per year.