Q4 2025 Honda Motor Co LTD Earnings Call
Okay.
<unk> financial results for the fiscal year and fiscal year ended March 31st 2025.
Operator: Time to attend Honda's financial results press conference for the fiscal year ended March 31st, 2025.
First the executives in attendance.
Toshihiro Mibe: First, the Executive in attendance. Director, President, and Representative Executive Officers, Toshihiro Mibe. Hello.
There are present in the representative executive officer until she doesn't mean bad Hello.
Are you.
Toshihiro Mibe: Thank you.
Yeah.
Director Executive Vice President and representative Executive Officer, Nordea Cai had a this is sky had a thank you for joining.
Noriya Kaihara: Director, Executive Vice President, and Representative Executive Officer, Noriya Kaihara. This is Kaihara. Thank you for joining.
Okay.
The rector managing executive officer, a J, whose humid.
Eiji Fujimura: Director, Managing Executive Officer, Eiji Fujimura. This is Fujimura. Thank you.
Jim: This is Jim it up thank you.
Mr. <unk> will give a summary of the financial results followed by Mr. Guy had his explanation of results of the fiscal year ended much to try to 'twenty, five and 'twenty 26, as well as shareholders return.
Toshihiro Mibe: Mr. Mibe will give a summary of the financial results, followed by Mr. Kaihara's explanation of results of the fiscal year ended March 2025 and 2026, as well as shareholders' returns. Mibe, please. Thank you for your continued understanding of Honda's business activities. The financial results for the fiscal year ended. or FYE in March 2025 and the outlook for FYE March 2026 are as follows. First summary of the financial results. Operating profit for the FYE March 2025 was 1,213.4 billion yen.
Guy: You bet My son please.
Guy: Thank you for your continued understanding of Honda's business activities.
Guy: And the financial results for the fiscal year and it did.
Guy: Or F y E. A much 2025 and the outlook for FY March I did twenty-six are as follows first somebody of the financial results operating profit for the F Y E. Much I did what was one Julien 213.4 billion yen in the fourth quarter of the same fiscal year, we changed the accounting method for automobile product or.
Toshihiro Mibe: In the fourth quarter of the same fiscal year, we changed the accounting method for automobile product warranty provisions. This one-time expense excluded operating profit was 1,341,000,000 yen.
Guy: Ante provisions.
Guy: This one time expense excluded operating profit was one trillion 241 billion yen.
Guy: But its telco business saw strong unit sales globally, achieving record highs and unit sales operating profit and operating profit margin.
Toshihiro Mibe: Motorcycle business saw strong unit sales globally, achieving record highs in unit sales, operating profit and operating profit margins.
Guy: Otherwise their business saw a decline in unit sales, mainly in China, and ASEAN and was impacted by increased North American incentives for Evs.
Toshihiro Mibe: Automobile business saw a decline in unit sales mainly in China and ASEAN, and was impacted by increased North American incentives for EVs. However, hybrid EV sales expanded. Operating cash flow after R&D adjustments, which represents the source of future investment, remained as high as last fiscal year, reaching 2,800,000,000 yen.
Guy: However, hybrid EV sales expanded.
Guy: Operating cash flow after R&D adjustments, which represent the source of future investment you made as high as last fiscal year, reaching two trillion 800 billion yen.
Guy: Our consolidated financial results for F Y E. My straight fixed impact of tariff policies is huge.
Toshihiro Mibe: On consolidated financial results for FYE March 2026, the impact of TAF policies is huge, combined with frequent revisions making it difficult to formulate an outlook. However... Reflecting the full 12-month impact as well as recovery measures, we have set the minimum levels of operating profit at 500 billion yen and net profit at 250 billion yen. Motorcycle business plans to sell 21.3 million units. and increase year-on-year. Automobile business, despite significant tariff impact, hybrid EV sales will be boosted, mainly in North America. Moving forward, the impact of tariff policies will be carefully assessed, recovery measures enhanced, while aiming for increased operating profit.
Guy: Abide with frequent revisions, making it difficult to formulate and outlook.
Guy: However.
Guy: It's I think the full 12 month effect as well as recovery measures, we have set the minimum levels of.
Guy: Operating profit at 500 billion yen and net profit at 250 billion yen.
Guy: Yeah.
Guy: Motorcycle business plans, it yourself 21.3 million units.
Guy: And increase year on year.
Guy: This is despite significant tariff impact.
Guy: It is sales will be boosted mainly in North America.
Guy: Moving forward the impact of tariff policies will be carefully assessed recovery measures enhance well Amy for increased operating profit.
Guy: Regarding shareholder returns at today's board of Directors meeting a dividend policy change was decided.
Toshihiro Mibe: Regarding shareholder returns at today's Board of Directors meeting, a dividend policy change was decided. to improve capital efficiency and ensure stable shareholder dividends despite uncertainties. We will switch from the conventional payout ratio to DOE. Annual dividend will increase 2 Yen from 68 Yen to 70 Yen per share.
Guy: To improve capital efficiency and ensure stable shareholder deferred dividends despite uncertainties.
Guy: We will switch from the commercial pay out ratio to deal eat annual dividend will increase to Yan from 68 and two.
Guy: 270 yen per ship next budget cycle and automobile business initiatives that support a stable revenue base.
Toshihiro Mibe: Next, motorcycle and automobile business initiatives that support a stable revenue base. The motorcycle business is world number one in market share, with annual sales of over 20 million units. Sharing platforms and power trains combined with scale of merit of dominant unit sales allows for a low-cost structure that surpasses other companies and thereby realize profit expansion. In automobile business, hybrid electric vehicle system costs have been reduced while enhancing marketability. The current model of profitability is 1.5 times the previous model. Unit sales have expanded globally, in particular North America.
Guy: The motorcycle business is well number one in market share with annual sales of over 20 million units showing purportedly subpar chase combined with scale a marriage of it done it in itself allows for a low cost structure that surpasses the other companies and thereby realized profit expansion.
Guy: And ultimately the business hybrid electric vehicle system costs have been reduced by enhancing bucket ability to cut my little profitability is 1.5 times the previous model.
Guy: It is just how they expanded globally in particular in North America.
Guy: In the latter half of this decade, we plan to introduce next generation H E V miles J, both performance and cost efficiency.
Toshihiro Mibe: In the latter half of this decade, we plan to introduce next-generation HEV models to evolve performance and cost efficiency.
Guy: Next initiatives fund has a corporate value.
Toshihiro Mibe: Next, Initiatives for Enhancing Corporate Value. Last fiscal year at this meeting, I explained our efforts to enhance corporate value in the past, present and future. Regarding past capital optimization efforts, the prospect is in sight as a result of last December's decision to repurchase 1.1 trillion yen of our shares.
Guy: Last fiscal year at this meeting I explained I evista enhance corporate value and the past present and future.
Guy: They got a pass capital optimization efforts. The prostate is inside as a result of last december's decision to repurchase one one trillion yet of our shares.
Guy: Meanwhile, I'm looking at the present and future automotive industry environment has changed dramatically requiring worth it ever flexible response.
Toshihiro Mibe: Meanwhile, looking at the present and future, the automotive industry environment has changed dramatically, requiring more than ever flexible response. Regarding automobile profitability, we will secure stable revenue to increase unit sales of hybrid EVs with better profitability, especially in North America, plus solid business foundation of our motorcycle and financial business. Looking ahead, the electric vehicle market growth has slowed down more than expected.
Guy: Yeah.
Guy: Regarding automobile profitability, we will secure stable revenues to increased unit sales of hybrid evs, the better profitability, especially in North America, plus solid business Foundation of a motorcycle in financial business.
Guy: You hit the electric vehicle market growth has slowed down more than expected. We reviewed trade timing of a comprehensive value change project in Canada, I decided to postpone a large scale investment.
Toshihiro Mibe: We reviewed timing of our comprehensive value change project in Canada and decided to postpone our large-scale investment. Details of the electrification strategy trajectory change will be explained in our business update on May 20th. Despite the continuing uncertainty in business environment, Honda will maintain stable management to a resilient portfolio by flexibly revising strategies according to market conditions, thereby enhancing corporate value.
Guy: Sales of the electrification strategy trajectory change will be explained in our business update on may two ideas.
Guy: Despite the continued uncertainty in business environment Hydro will be changed stable management to a resilient one.
Guy: Folio by flexibly revise any strategies according to market conditions, thereby enhancing corporate value.
Guy: Next.
Guy: Does that tie had ask will give details of the financial results.
Noriya Kaihara: Next, Mr. Taihara will give details of the financial results.
Guy: Okay.
Guy: I will explain the results of the fiscal year, ending March 2025, because the outlook for F Y E and much of 2026 and shareholder returns.
Noriya Kaihara: I will explain the results of the fiscal year ending March 2025, the outlook for FYE March 2026, and shareholder returns. First, regarding the group sales volume for FYE March 25, for motorcycle businesses, 20.572 million units sold, mainly due to increase in Asia year-on-year. For automobile businesses, 3.716 million units sold, with the decline of volume in Asia or mainly in China. And for power products businesses, 3.7 million units sold, with the decline mainly in Europe.
Guy: First regarding the group's sales falling for F Y E. Marcia 25 for motorcycle businesses.
Guy: You pointed to 572 million units sold was mainly due to increasing as your year on year.
Guy: Mobile businesses of 3716, maybe your units sold with the decline of our volume in Asia or mainly in China and for power production efficiencies are as people.
Guy: Several new units sold with a decline mainly in Europe.
Guy: Next regarding the consolidated consolidated financial results for F Y E. Much 25 shopping from F. R. E. Much tortillas went to five we changed the method of measuring production around to prohibitions through Alec to eat for the sales of a major automotive our production sites so that their measure to comprehensively at the time of the.
Noriya Kaihara: Next, regarding the consolidated financial results for FYE March 2025, starting from FYE March 2025, we changed the method of measuring product warranty provisions to allocate for the sales of major automotive production sites so that they are measured comprehensively at the time of the sale. While this results in a one-time expense for FYE March 2025, it will allow us to limit the impact of product warranty expenses on earnings volatility from this fiscal year onward. Such a one-time impact has been reflected on the operating profit of the fiscal year, which marked 1.2134 trillion yen, that was 168.4 billion yen short of the previous period.
Guy: While this will result in a one time expense for F Y E March 20th went to five it will allow us to limit the impact of our product warranty expenses on earnings volatility from the fiscal year.
Guy: This fiscal year onwards.
Guy: A one time impact has been reflected on the operating profit of the Frisco ear, which marked a one point or 2134 was really a yen that was 168 point for vizio again sort of the previous period.
Guy: Would you be in earnings of affiliates was 900, and so I'm really going again down by our hundreds and hundreds of nine point of it really again, mainly due to the decline in sales volume in China, that's appropriate attributable due to.
Noriya Kaihara: Equity in earnings of affiliates was 900 million yen down by 109.8 billion yen, mainly due to the decline in sales volume in China. Net profit attributable to the owner of the parent leased by us was 271.3 billion yen, totaling 835.8 billion yen.
Guy: The owner of the parent breached by US 271 point to 3 billion again totaling 800, or so two 5.8 with you again as Mr. <unk> explained at the beginning the results.
Noriya Kaihara: As Mr. Mibe explained in the beginning, the results... Excluding the impact of the change in product warranty estimates in not-popular businesses are shown on the right-hand side of the slide.
Excluding the impact of the change in product royalty estimates you know what their positions are shown on the right hand side of it.
Guy: Slide <unk>.
Guy: Next I regarding factors of ups and downs drove up with appropriate for they bought E. Much but when you buy your own year operating profit was a one point that we are who wants with young yen down by 48 billion yen year on year before reflecting the impact of the change in production raunchy instruments with automobiles.
Noriya Kaihara: Next, regarding factors of ups and downs of operating profit for the FIE March 2025, year-on-year, operating profit was ¥1.341 trillion, down by ¥40.8 billion year-on-year before reflecting the impact of the change in product warranty estimates for the automobiles. The factors behind have been 233.6 billion yen decline in profit due to sales impact, increase of 525 billion yen in profit due to price and cost impact, 85 billion yen decline in profit due to miscellaneous expenses, 153.5 billion yen decline in profit due to research and development expenses, and 93.6 billion yen decline in profit due to production impact.
Guy: The factors behind you have been asked.
Guy: So we have 233 are appointed six guberniya declining appropriate do it yourself back to increase about a 525 video again appropriate due to price and cost impact eighty-five, PV or yen declining appropriate due to miscellaneous expenses 155, hundreds and 53.
Guy: Five be doing again declining appropriate due to the we're supposed to the volume expenses and $93 six because you don't get a declining appropriate due to hurricane impact where you got to be a pretty broken by business segment for motorcycle businesses operating profit was 663 4 billion again automobile business is 200 symposia three points HPV again finance.
Noriya Kaihara: Regarding the operating profit by business segment, for motorcycle businesses operating profit was 663.4 billion yen, automobile businesses 243.8 billion yen, financial services businesses 315.6 billion yen, and power products and other businesses 9.4 billion yen operating loss. Regarding the factors of ups and downs for motorcycle business performance, the operating profit marked the record highest of ¥663.4 billion up by ¥107.2 billion year-on-year. With factors behind, particularly of the sales impact, additional ¥48.1 billion was made mainly due to sales volume increase. For price and cost impact, additional ¥175.3 billion was made due to improved product value and effective pricing in response to the inflationary impact caused by the depreciating currencies in emerging markets.
Guy: So it'd be six businesses and 315, six with euro yen and the APA production. The other businesses nine quote a full video again operating losses.
Guy: Regarding the factors about ups and downs for motorcycle business performance of the operating profit amount. They work with the highest of our $663 4 billion up by hundreds and 7.2 billion yen year on year.
Guy: With factors behind particularly of the sales impact additional 48.1 billion yen was made mainly due to sales volume increase for price cost impact additional 175.3 billion gain was mainly due to improved weather.
Guy: The pricing in response to the deflationary impact caused by the depreciating currencies in emerging markets 20 points lumpy. The OEM decline improvement due to miscellaneous expenses at 25, $21 5 billion declining appropriate do research and development expenses.
Noriya Kaihara: ¥20.1 billion decline in profit due to miscellaneous expenses. ¥21.5 billion decline in profit due to research and development expenses. And ¥74.6 billion decline in profit due to foreign currency.
Guy: And $74 6 billion again declining appropriate due to foreign currency regarding factors of automobile business is upper teens appropriate people, which predicting the impact of a change of estimates profits declined by 189 point won't be on game on year on year, resulting in 371 a.
Noriya Kaihara: Regarding factors of automobile businesses, operating profit before reflecting the impact of a change of estimates, profit declined by ¥189.1 billion year-on-year, resulting in ¥371.5 billion sales impact. For research and development expenses, profit declined by ¥127 billion mainly due to increased resources allocated mainly to EV currency exchanges. Profit declined by ¥26.7 billion.
Guy: Five figure young shelves impact our profit declined by 330, threep or shouldnt be there, yet and do it yourself or the production and the increase of incentives to boost D. B cells for price cost impact appropriate increased by $336 5 billion yen depressing effects the commensurate with improved further values.
Guy: Expenses appropriate declined by <unk> eight points to be their young for research and development.
Guy: Brokerage declined by $127.
Guy: At 127, really again, mainly due to increased where soldiers allocated mainly to E. Commerce exchanges are perfect declines by 27.
Kevin Williams: Kevin Williams.
Speaker Change: Regarding the cash flow situations for F Y E muscarinic quantify the free cash flow of their printing companies, excluding the financial services business. This was a $665 8 billion.
Noriya Kaihara: Regarding the cash flow situations, for FYE March 2025, the free cash flow of operating companies excluding the financial services businesses was ¥665.8 billion. Net cash balance at the end of the period was ¥3,215.7 billion. And finally, operating cash flow post R&D adjustment was ¥2,806.6 billion.
Kevin Williams: Net cash balance at the end of the period reached where the young and.
Kevin Williams: $215 seven Vizio again, and finally operating cash flow pushed our RMT.
Kevin Williams: Which took review on $806 6 billion yen and the consolidated earnings forecast for the fiscal year ended March when it was just shifts regarding the group's sales volume year on year, what's the cigarette business sees when she wants to trade with your units are expected to reflect things like.
Noriya Kaihara: And the consolidated earnings forecast for the fiscal year ending March 2026. Regarding the consolidated earnings outlook for the FYE March 26, operating profit is projected to be ¥500 billion. And the net profit attributable owner of the parent company is ¥250 billion. Correct assumption is set at ¥135 for U.S. dollar throughout the year. Regarding factors behind expecting operating profit on-year, the operating profit is expected to be ¥1,402,000,000, excluding the impact of exchange rate and tariffs, which is to maintain the same level as previous fiscal year. Regarding price-cost impact, profit will be up by ¥250 billion, due to price-cost measurement with improved product values.
Kevin Williams: Asia.
Kevin Williams: Their business is a three point or six 2 billion units expected, reflecting decreased mainly in Asia and the pop was up three point and such.
Kevin Williams: 7 million units.
Kevin Williams: Reflecting the decrease mainly in North America regarding our consolidated earnings outlook for the F. R E. Much 26 operating properties.
Kevin Williams: <unk> to be a 500 500 billion yen and the net profit attributable to owner of the parent company is a 250 billion yen for extra assumption is set at 135 year four years further throughout the year.
Kevin Williams: Regarding factors behind us with Zynga operating profits year on year.
Kevin Williams: Operating appropriately expected them to be once we're beyond 402 billion again, excluding the impact of exchange rate and tariffs I was just I mean would you still maintain the same level as previous fiscal ear perks impact five 452 billion again decline in brokerage as expected that dissipate deeply appreciate the currencies of the budget.
Kevin Williams: Market seller and they felt that the timing is still being examined however, the potential impact to the mission of the Arizona. Joseph now are incorporated in the focused efforts to mitigate the impact of the tariffs is projected to be 200, really again and to explain the factors behind our Apple Apple a compression to U a E.
Kevin Williams: Year on year due to shelf impact are appropriate will go up by a 156 point won't be young young with ourselves for increased increase of motorcycles with automobile in North America regarding price cost impact our profits will be up by 250 video again due to price because misread.
Kevin Williams: They proved that protects the values expenses decreased by $219 1 billion, reducing profit recessions volkmann species Ah it increased by 126, because you know again, the accretion was appropriate a forecast of the types of investments as appreciation that ratio should devote consenting at wassa.
Noriya Kaihara: Expenses will increase by ¥219.1 billion, reducing profit. Research and development expenses, it will increase by ¥126 billion, decreasing the profit.
Kevin Williams: 60.
Kevin Williams: Right.
Kevin Williams: Regarding shareholder returns a Honda positions returning value back to shareholders is that the management is a priority I think or if I E. March 26, we will change our dividend policy and a real she will introduce D. O E. As a return indicator we will strive for we will strive.
Noriya Kaihara: Regarding shareholder returns, Honda positions returning value back to shareholders as a top management priority. Starting FYE March 26, we will change our dividend policy and will introduce a DOE as a return indicator. We will strive to pay out aiming for 3%. Despite the business environment being uncertain, we will realize a more stable and continuous returns. For FYE March 25, the year-earned dividend is determined at 34 yen per share and annual dividend at 68 yen per share. And for FYE March 26, expected dividend is to be 70 yen per share, up by 2 yen from the year before.
Kevin Williams: I have to pay out.
Kevin Williams: 40%, despite ambitious department being uncertain, we will realize a more stable and a continuous our returns for F Y E. Much went to five the ear to.
Kevin Williams: The dividend is it determined the authority for yen per share annual dividend of $68 68 per share.
Kevin Williams: And therefore, if Y E March 26th expected the dividend is that to be 70 yen per share up by two young from the ear before.
Kevin Williams: Yeah.
Kevin Williams: Regarding the share buyback or by one point once really again that we made a decision on <unk> on December 23rd 24, we have acquired or the equivalent of about 589.5 billion worth of shares as of the April 30th 2025 that concludes my explanation.
Noriya Kaihara: Regarding the share buyback of around 1.3 billion yen that we made a decision on, on December 23rd, 24, we have acquired the equivalent of about 589.5 billion yen worth of the shares as of the April 30th, 2025.
Noriya Kaihara: That concludes my explanation. Thank you very much for your attention.
Kevin Williams: We're much more attention.
Kevin Williams: Okay. Thank you very much for your listening in.
Operator: Thank you very much for your listening, and now we would like to proceed to Q&A. Please use the Zoom link that has been provided to you beforehand. In the interest of time, please limit your questions to two per person. When asking, please turn on your camera and microphone. Those of you who have questions, please indicate so with the raise hand button, please.
Kevin Williams: Now I'd like to proceed to Q&A.
Kevin Williams: Did anyone in mesothelioma and please use the zim link that has been provided to you beforehand.
Kevin Williams: In the interest of time, please limit your questions to two per person.
Kevin Williams: When asking please turn on your camera and microphone.
Kevin Williams: Sure.
Kevin Williams: If you have questions. Please indicate so with the raise hand button. Please.
Kevin Williams: <unk>.
Kevin Williams: Okay.
Kevin Williams: Yeah.
Kevin Williams: Yeah.
Kevin Williams: Yeah.
Kevin Williams: Yeah.
Kevin Williams: Right.
Speaker Change: The first question the home care as I assume from Nikkei still keen on that please.
Operator: The first question from Nikkei, Okinawa, please.
Kevin Williams: I just think it says okay. That's M. Nikkei he was wondering like the small thank you.
Okinaga: This is Okinaga from Nikkei. Thank you. USMC, about the tax, for the time being, there were to be exceptions, but you have added on 650 billion yen, so what is the reason for this? and what is the breakdown? Can you explain? That's the first question.
Kevin Williams: I'll use.
Kevin Williams: Using G U S. M C about the tariffs, which are proven by the proton beam.
And they would to be exception.
Kevin Williams: Tim you have added 650 billion yen. So what is the reason for this.
Kevin Williams: And what is the breakdown can you explain that's the first question and the second question.
Okinaga: And the second question.
Kevin Williams: About the postponement in Canada can you explain about the reason for that.
Okinaga: about the postponement in Canada. Can you explain about the reason for that? Well first, about the TAF, yes, we have estimated 650 billion yen, but finished cars and components included, the TAF is very complicated, and the calculation that we have done and the basis for this calculation, I think you've seen this. and for the finished car. from Canada to the United States, also from Mexico to the U.S. and from Japan to the United States. There are different tariff conditions that needed to be taken into consideration and the result is shown on the right-hand side. And also about the components.
Kevin Williams: Hi.
Speaker Change: Muslims well, firstly about the China local cardinal convert Euro zone.
Kevin Williams: Yeah. So we have an estimated 650 billion yen.
Kevin Williams: Tim finished goods and components included the tariff is a very complicated and the calculation that we have done and the basis for this calculation I think you've seen this.
Kevin Williams: And for the finished cars.
Kevin Williams: Canada as the United States also from Mexico to U S and yeah from Japan to the United States.
Kevin Williams: Are there different tests conditions that needed to be taken into consideration and the result is shown on the right hand side.
Kevin Williams: And also about the components.
Kevin Williams: Well U S. M C. A M. It is within the U S. M C H.
Okinaga: U.S. MCA, if it's within the U.S. MCA, the components are exempt, but there's from Tier 1, Tier 2, to Tier 3 components, and therefore we need to have the country of origin certification, and this is not fixed yet. So 25% is being included because we have yet to obtain the certificate. So this included is $250 billion. Well, this is the minimum, the bottom. And I think the type of impact will continue to change as time goes by, and we have to think about these major changes taking place. In the middle, we talk about the automobile device here, in the middle here.
Kevin Williams: Companies are exempt, but theres from tier one tier two to tier three components and therefore, we need to have in the country of origin certification and this is not fixed yet so a 25% is being a credit because we have yet to obtain a debit card. So this is it is such a very brilliant.
Kevin Williams: Yeah.
Kevin Williams: The business is right now there isn't a bad time, so it's a 36 billion yen impact and power products again.
Kevin Williams: But and $24 3 billion yen and added 650 billion yeah, well. This is the minimum at the bottom and then.
Kevin Williams: Well I think the type of impact will continue to change as time goes by and we have to think about these major changes taking place, but Uh huh, we talk about the automobile device here in the middle here.
Kevin Williams: And Additionally, there are pipes, which are exempt from the tab, but now they.
Okinaga: There are parts which are exempt from the tariff, but the amount and volume has not yet to be looked into, so it's included, 25%, and this is said to be ¥220 billion, so these are the amounts that we have calculated, but if we scrutinize and come up with the details, there will be a number of components which will be exempt from the tariff. So again, that ¥500 billion, how much can be added on, is something that we have to look into. So this, the operating profit of 500 billion, this is bottom, the minimum. And so please understand this number to mean that way.
Kevin Williams: They are about and volume has not yet to be looked into so it's a good 25% and this is I would say to be <unk>. Two 220 billion yen. So these are the amounts that we have calculated but if we scrutinize and come out with the details there will be a number of competitors, which would be exam.
Kevin Williams: I thought the tab so against that 500 billion how much can be added on is something that we have to look into.
Kevin Williams: So are there some of the operating profit of 500 billion and this is about a minute or so.
Kevin Williams: So please understand this number to be that way.
Kevin Williams: Yeah.
Kevin Williams: When it comes in all.
Kevin Williams: The.
Kevin Williams: My daughter Nickel go how we're going to respond to these tab that included.
Okinaga: How we are going to respond to these tariffs, that included, is we want to make a recovery from this 500 billion. About the specifics of how we were responding, well, up until March, Canada, Mexico exports, we want to promote this and build up the inventory in the United States. And we have been taking such measures up to that time, and in the short run, internally, we want to reduce our costs, thoroughly reduce our costs. And in addition to that, the allocation of the finished products, we want to optimize. This has been reported in the newspaper, the Civic 5-door hybrid, which is being produced in Yorii, there are other components.
Kevin Williams: And so we wanted to make a recovery from this 500 billion.
Kevin Williams: Tied to the specifics of how we were responding well.
I bet you much.
Kevin Williams: Canada, Mexico exports.
Kevin Williams: Next we go about this and build up David joined the United States I'd be happy to take your such measures up to that time.
Kevin Williams: In the short run them internally and we want to reduce our costs.
Kevin Williams: Or are they reduce our costs and in addition to that the allocation of the finished products you want to optimize.
Kevin Williams: So this has been reported the newspaper and the civic five door or hybrid and what did you say producing journey are there other components. So I bet you all Jews have tapered there'll be produced in Japan after will be transferred to Indiana, and H C. M. They kind of see IV for the United States E L.
Okinaga: So up until June, September, they'll be produced in Japan, but then after will be transferred to Indiana. And HCM, the Canada CRV for the United States, ELP will be producing instead in the United States. So we are thinking about the production allocation, optimizing the allocation where possible. And also for the dealers and suppliers, stakeholders, we are co-creating so as to minimize the impact of tariffs. About the prices, we have to observe what competitors are doing and think about the revision range and which models for which we will revise our prices. So we want to be careful and carefully observe what is happening.
Kevin Williams: P M.
Kevin Williams: We'll be producing is that in the United States. So we are thinking about the production allocation optimizing the allocation where possible.
Kevin Williams: Also for the dealers.
Kevin Williams: Suppliers stakeholders that we are co, creating so as to minimize the impact of tariffs.
Kevin Williams: Okay.
Kevin Williams: And about the prices.
Kevin Williams: We have to observe what competitors are doing.
Kevin Williams: Think about the revision of the range and which my those are well, which we will revise our prices. So we want to be careful edge carefully observe what is happening.
In the mid term.
Okinaga: In the mid-term, If the tariff measures are to be in place for a long time, and then we will have to increase our production capacity in the United States. We've already began studies on this. First, we have to think about the capex in the United States. Well, they have a two shift, but maybe we can increase to three shift production and also operating over the weekend. There is room to increase the production capacity in the United States, and we are trying to look into what will happen as a result of that. And then after will be the capex, capital expenditure.
Now that would be cool.
Kevin Williams: If the tariff measures are to be in place for a long time and then we will have to increase.
Kevin Williams: Increase our production capacity of United States. We've already began studies on this there first we have to think about the capex, but as the United States and the world. They have a two shift for them, but maybe we can English J three shift production and also abating.
Kevin Williams: Over the weekend there is room to increase the production capacity that it stays and we're trying to look at the what will happen as a result of that and then after will be the capex capital expenditure, but at any rate we have to secure workers and to think about the impact on the supply chain because there'll be huge and we wanted to.
Okinaga: But at any rate, we have to secure workers and to think about the impact on the supply chain, because it'll be huge. We want to observe what is happening and at the appropriate timing think what needs to be done. We want to be prudent in such effort in dealing with tariff measures.
Kevin Williams: What is happening and at the appropriate time, Inc.
Kevin Williams: I think what needs to be done we want to put it in such ethics and daily with tariff measures.
Kevin Williams: The bad and the Canada.
Shinji Aoyama: Canada Representative, Shinji Aoyama, Honda Motor Well, last year, on April 25th, we made the announcement to the EV, the 240,000 battery Unknown Representative, Shinji Aoyama, Unknown Attendee, Shinji Aoyama, Unknown So Canadian dollar of 15 billion worth of investment and it was planned to be start operation in 2028. We did make that announcement back then. This was thinking that the EV demand would increase in the future and we have to think about the upstream resources and the downstream service. We wanted to enhance our Canada value chain so as to create the electrification business in Canada. But as you know, in North America, the EV market growth is slowing down.
Case.
Kevin Williams: Well last year.
Kevin Williams: On April 25th we had made the announcement and the E V. Other they're 240000 and battery.
Kevin Williams: 36, Gigawatts per hour and also of the Pasco future and I felt like I said the joint venture.
Kevin Williams: Hum.
Kevin Williams: Canadian dollar 15, 1 billion worth of investment.
Kevin Williams: And it was planned to be started operation in 2028, we did make that announcement that that.
Kevin Williams: But wherever mom automotives.
Kevin Williams: This was the thinking that they'd be demand would increase in the future and we have to think about the upstream resources and the downstream service and we want teaching Hansa, Canada value chain, so as to create the electrification business is.
Kevin Williams: The future, but as you know in North America.
Kevin Williams: The EV market and growth is slowing down.
Kevin Williams: And so as of now we think that we should postpone for at least 22 years. It has been decided at U S. M C.
Shinji Aoyama: And so as of now, we think that we should postpone for at least 22 years. This has been decided. USMCA, we are thinking that this will not change USMCA. If the conditions were to change, at that point in time, we have to revisit this. As for the specifics, what happens after two years at the starting time of the project, you have to observe what is happening and ultimately make the decision.
Kevin Williams: And we are thinking that this will not change the U S. M. C. A if the conditions were to change at that point in time, we have to revisit this.
Kevin Williams: As for the specifics what happens after two years and they are starting talking about the project you have to observe what is happening and ultimately make the decision.
Speaker Change: Mike Wilkins will come and go.
Kevin Williams: Okay.
Shinji Aoyama: We are consulting with the Canadian government and Ontario province, and as for this postponement, we have already received their consent. It is all for me. Eiji-chan.
Kevin Williams: We are consulting with the Canadian government and Ontario.
Kevin Williams: Province, and have asked for this postponement we have already received their consent.
Kevin Williams: As a hobby.
Kevin Williams: I think that.
Kevin Williams: Well, yes, I'm Super Bowl so casino.
Kevin Williams: We have provided some additional information.
Eiji Fujimura: We have provided some additional information and we have included the premises for the tariff calculation estimation.
Kevin Williams: We have included the premises for the tariffs.
Kevin Williams: Calculation estimation, well, we have looked at others, our competitors information that they disclosed I think the conditions setting is quite different company by company.
Eiji Fujimura: Well we have looked at others competitors information that have been disclosed and I think the condition setting is quite different company by company and so we're wondering how we should be looking at this and so we've included this summary. Well the Japanese companies over the past week or so have been announcing different things including or not including certain factors and GM and Ford for example they've disclosed information and looking at what they're doing they well it's a nine month impact because they closed the books in December by GM so they're looking at four thousand five thousand billion nine month impact and so annually it will come into some 500 billion yen of the 650 billion as MIBEI has said we have motorcycle business excluding it's about 500 billion yen so it's more or less Unknown Speaker, Unknown Translator, Unknown Speaker, Unknown Translator, Unknown Translator, 12 months, it's $450 billion, so it's close to our number.
Kevin Williams: I'm wondering how we should be looking at this and so we've exited the submarine.
Kevin Williams: The Japanese companies.
Kevin Williams: Over the past week, or so I'm happy to now see and if it takes a pretty good I think Citi said the actors at GM and Ford for example, they've disclosed information and I'm looking at what they're doing are they are out and they said nine months it back because they close their books of December a G. M them. So theyre looking at 4000.
Kevin Williams: 5000, 1 billion, a nine month impact and so annually.
Kevin Williams: It will come to a 500 billion yen at the 650 billion as Bill has said we have motorcycle business exiting it's about 500 billion, yet so it's more or less.
Kevin Williams: So I think that there are there are nice.
Kevin Williams: 900, whereas we have 500 and Ford also they have a high ratio of U S production.
Kevin Williams: So likewise and if you calculate it yourself.
Kevin Williams: 12 months, it's a 450 billion so it's close to our numbers.
Kevin Williams: In Japan.
Eiji Fujimura: In Japan, the amount is... calculating the impact. It's about 300 billion, but we are 450 billion. So they're saying that ours is high impact, but we are high by 150 billion versus because the motorcycle BP and also the components have impact.
Kevin Williams: Yes.
Kevin Williams: Green giant calculated back that day.
Kevin Williams: It's about as we had two 1 billion, but we are 450.
Speaker Change: <unk> 50 billion.
Speaker Change: I say that ours is high there that but will there be a high by 150 billion versus because they have a bunch of cycle BP and also supported a tap.
Eiji Fujimura: As we've explained, well USMCA, whether we can comply or not on the components level is not clear to us. We have to look into the details. And therefore we had conservative in terms of including this.
Speaker Change: In fact, as we back stage well U S. M C. A whether we can apply or not or the components level, it's not clear to us they have to look into the details and therefore, we had conservative in terms of equity debt and for Mexico.
Eiji Fujimura: And for Mexico. of the imports from Mexico, this prologue, the battery EV from GM, and this is also included. So I think this is the reason for this difference. So $450 billion appears to be quite big, but I think, compared to other OEMs or the media analysts. Though there is a slight gap, I think we are more or less thinking about the same image.
I'll stay in place of our Mexico, Theres prologue that battery E V from G. M. And this is also included so I think that this is the reason for this difference.
Speaker Change: 450 billion and appears to be quite big but.
Speaker Change: I think compared to other Oems or are the media analysts.
Speaker Change:
Speaker Change: Though there is a slight gap.
Speaker Change: We are brothers, so thinking about the same image.
Speaker Change: So we've added a summary of our estimation assumptions for your reference.
Eiji Fujimura: So we've added a summary of our estimation assumptions for your reference.
Speaker Change: Yeah.
Speaker Change: Okay.
Tanaka: Thank you very much Mr. Tanaka with promotional next question.
Eiji Fujimura: Thank you very much, Mr. Okinaga.
Operator: So, next question.
Speaker Change: Yeah, my eating as they finished another hershey piece.
Narahashi: Ayumi Uri, newspaper. Mr. Narahashi, please. Narahashi from Yomiuri Newspaper Company. Can you hear me? Thank you.
Tanaka: Yeah.
Tanaka: Yeah.
Tanaka: [noise] original demand meta hashi from really a newspaper company.
Speaker Change: Can you hear me.
Speaker Change: I have two questions.
Narahashi: I have two questions. One, as Mr. Fujimura said earlier, competitors estimate, or not estimate, the impact by the tariff. However, you decided to disclose your estimates in detail. What is the intention by doing that?
Speaker Change: Wong.
Speaker Change: As Mr. Fishman said earlier, our competitors estimates are or not estimate of the impact by the tariff.
Or are you decided that you disclose your estimates are any details but is your intention by doing that and second question is about our relationship graduate new shuttle.
Narahashi: And second question is about your relationship to Nissan. Those talks were broken up because of business situation. They have announced to make recovery plans, and it is difficult for them to survive being alone.
Speaker Change: You had or they had a well a well they are those talks.
Speaker Change: We're a broken up because of a vicious oh, she's ratios, where they are but they have announced so to make her recovery plans are and it is difficult for them to survive a big alone. However are what is the relationship with them I can report that being in the cooperative relationship.
Narahashi: However, what is the relationship with them going forward? Would that be the collaborative relationship or any business integration talks?
Speaker Change: Or an ambitious integration talks should be back again.
Operator: Be back again.
Speaker Change: Yeah.
Speaker Change: Sure, let's start with your terrified by Mr Fujiwara and Nissan for myself.
Narahashi: So let's start with the tariff by Mr. Fujimura and the Nishan Formation. Thank you very much for your question. So we decided to disclose our assumption because the forex and business economic environments are many uncertainties in those areas but despite that we decided that to give you the guideline like this because this is something we should do as a business company. and there are areas which is very very uncertain and still we decided to look into the air situation as far as we could assess and of course the interpretation of the taxation law is difficult too and we had our own interpretation with the help of the American Honda Representative too and estimated impact on the air yearly annual business.
Speaker Change: So thank you very much for your question I see that study. So we decided that you disclose our assumption because the for Rex and ambitious comedy game environments are.
Speaker Change: Many uncertainties in those areas, but despite that we decided that to D V. The guideline like this because this is something we should do as a.
Speaker Change: Company.
Speaker Change: And are there are areas, which is very very uncertain and are still we decided that you are looking to the situation as far as we could judge us US and of course are the interpretation of the taxation mode is difficult or too and we had oh on it.
Speaker Change: Appreciation with the help of the area you are America Honda.
Speaker Change: Our presence at Jimmy Choo, and our estimated impact on the Earth yearly annual.
Speaker Change: Business.
Speaker Change: We decided that this is Doug and I'll share that with people outside and even without in the company are we could have a better understanding of the potential impact internally and no short term.
Narahashi: We decided to assist that and share that with people outside. And even in the company, we could have a better understanding of the potential impact internally in the short term, midterm, long term, we could come up with a kind of mitigation measures. And then there are things we could do internally as a mitigation or things which can collaborate with the supplier or we could look for And again, the business integration talks will not be on the table for more while going forward. However, we need to try to maximize the benefit out of the collaborative efforts besides.
Speaker Change: Mid term long term are we could come up with a kind of a mitigation measures and then are there essentially could you internally as a mitigation.
Speaker Change: Or things, we can collaborate with the supplier.
Speaker Change: Or are we could look for.
Speaker Change: The way to speak.
Speaker Change: Speak to the author Richie are the politics boosters and a that can be those are potential mitigation measures are.
Speaker Change: It would be accurate to think of them and then put them on the table and then it is a big negative impact worthy and that would give a negative our impressions you know way to you.
Speaker Change: However, this is the worst case scenario than a weekend them or try to find out what we could do going forwards.
Speaker Change: I'm not too sure if I answered. Your question. However, this is what we have in mind are in disclosing such estimate to unit.
So a five five.
Speaker Change: 500 up with young Ah, that's the air assist amount and in order to make it kind of more wisdom, they accepted or a number we decided to share with you those tables with you.
Speaker Change: And just to understand better about it and then with Nissan.
Speaker Change: As of the 13th of February I would be disclosed to you about our decision.
Speaker Change: Decision not to go for it.
Speaker Change: And there is no further our progress after that and besides we had the strategy capacitor ship a Mou that was entered in August of last year, which include a Mitsubishi automotive and we continue to work on dance detracted maximize the collaboration airports anticipating they are.
Speaker Change: George I research will be our next generation issue.
Speaker Change: Our platforms and our V or commercialize their platforms and are the or.
Speaker Change: Our environmental social nation energy it was so cheap and so on and those areas are being assessed as well once again.
Speaker Change: There are greater details I'd also today, we are in a very different environments to including Rytary situation too and so we are thinking about a father collaboration potential either new environments.
Speaker Change: And again are the business integration talks with notch be Oh, the table for more wall going forward. However, we.
Speaker Change: We need to try to maximize the benefits out of the a collaborative airports besides and we'd like to go on with this strategic partnership.
Narahashi: And we'd like to go on with this strategic partnership so that we can find out new directions for the growth of the businesses so that we can gain the competitiveness to lead the industry going forward. And we will make progress in that regard.
Speaker Change: So that we can find out a new direction for the growth of the businesses. So that we can gain the competitiveness.
Speaker Change: To lead the industry going forward and we will make our progress in that regard. So that is all for Nissan. Thank you very much.
Narahashi: So that is all for Nishan.
Operator: Thank you very much.
Operator: Thank you.
Speaker Change: Thank you.
Nishiyama: Thank you very much, Mr. Narahashi, and next question is from Asahi Shimbun, newspaper, Nishiyama, please. Can you hear us? Yes, sorry. I'm Nishiyama from Asahi Shimbun newspaper. I have two questions. The first question. For the next fiscal year, your outlook, well, you've given the explanation, but overall... Well, um, I think the Prophet is quite, um... Unknown Speaker, Unknown British Imparters to Grant An informed tackling by the U.S. is a mandatory part of the race for incentives. So, what other measures are you going to take? You said that you don't want to add this on to the prices, but still, well, I think that you have to compare yourself to the competitors.
Speaker Change: Thank you very much Mr. Another Hershey and next question is from Asahi Shimbun newspaper Nishiyama. Please.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: Yeah.
Speaker Change: Can you hear it like the Mafia wars going on yes, yes, sorry, yeah.
Nishiyama: I am nishiyama from Asahi Shimbun newspaper I have two questions.
Speaker Change: The first question.
Nishiyama: Towards next fiscal year your outlets.
Speaker Change: You've given the explanation, but overall.
Yeah.
Speaker Change: Well I think the profit is quite good.
Speaker Change: Going to be.
Speaker Change: Dropped chamblee, our decline, but what is your view on this is to me Dan you said that you're going to take various measures to make a recovery like can you talk about the specifics and secondly.
Speaker Change: How about the unit sales outlook, well a b I.
Speaker Change: Well the motorcycle and was a positive but there will be a drop in demand due to the Trump tariffs so what about incentives.
Speaker Change: I think of them there is a race for it said if so what are the measures like they did take what you said that you don't want to add this onto the prices are.
Speaker Change: Still.
Speaker Change: But I think you have to compare yourself to the competitors, but what are your thoughts on this.
Nishiyama: But, what are your thoughts on this?
Speaker Change: Hi.
Speaker Change: So that's about a minute about your first question about our outlook.
Nishiyama: about your first question about Outlook. Well, looking at the previous fiscal year, I talked about the new provision, the comprehensive warranty provision, and also the EV provision with GM. We have about 1.1 trillion operating profits. I think it is more or less online, the automobile. So there is a drop of 43 million units, including the 21,000 in the United States. So we think that we can ensure this much profit. The motorcycle is 660, and the power product is 310, so we are generating a 1 trillion yen profit. For the automobile, it's a little less than 400 billion, but for BEV, the gross profit is minus 200 billion, and R&D is minus 400, so BEV is minus 600 billion.
Speaker Change: Well I'm looking at their previous sub fiscal year, well I talked about Turbo then you their vision of the company.
Speaker Change: Compared to the warranty provision and also the E V a provision with G M.
Speaker Change: We have about 1.1 trillion operating profit so I think it is more or less online so.
Speaker Change: So automobile so there is a drop of 43 billion units and liquidity are the 21000 and it states that we think that that we can and.
Speaker Change: Sure this much profit.
Speaker Change: And also.
Speaker Change: So.
Speaker Change: Then motorcycle 60 edge product mm 310, so we are generating a virtually yet.
Speaker Change: Mm for the automobile is a little less than 400 billion budget for Beth and the gross profit is minus to her.
Speaker Change: Oh D. It's minus 400, so Beth it's minus 600 billion and ice including hybrid is about one trillion profit.
Nishiyama: And ICE, including hybrid, is about 1 trillion yen profit, so it is such a business. And automobile, ICE, and motorcycle, and financial services, we will earn profit there, and continue investment for electrification, plus the investor's return. This is quite conservative, but still, 135 yen, so it's about 450 billion negative from 150 yen, and also there is the recovery of 200, and so net is 450 billion. So how we exclude and recover from the impact of the tariff policies, and to what extent we can do this will determine how much of an improvement we will see for this fiscal year.
Speaker Change: It is such a business.
Speaker Change: Automobile I C E motorcycle and financial services to be able to earn profit there.
Speaker Change: No. It did your investment for electrification plus.
Speaker Change: And investors return and we have tried to balance this or this was the case in the previous fiscal year.
Speaker Change: But of the one or two key and as I said, we are looking at why aren't you 35 yen against the dollar.
Speaker Change: This is a quite conservative.
Speaker Change: Mm 135 P M.
Speaker Change: It's about a 450 billion.
For 150 P M and also and there is a the recovery of charge at any time.
Speaker Change: 150 billion and altogether.
Speaker Change: Well there are this is based on the information that we have locally.
Mr. Fishman: Mr. Fishman said M D.
Mr. Fishman: The U S. M C. A compliant Pi zero as of now and we think that that would be less of an impact as well. So this is the first quarter I think that we can enhance the precision of that calculation and with their recovery measures, we want to try to reduce their Baghdad, so well.
Mr. Fishman: It's just it's a bad currency and in fact, it had we not had this I think and Joe will be born and then our previous fiscal year. We do have the capability to generate the same operating profit. So how are we exclude and we kind of from the impact of the tariff policy.
Mr. Fishman: And to what extent, we could do this we'll determine how much added probably we will see for this fiscal year.
Nishiyama: and about this fiscal year of the 500 billion, well, the VEF market is cooled down, and there's a one-time loss possibility, accounting-wise, this could become a discussion. Well, we have 200 billion factored in for that, so that included the 500 billion is thought to be the bottom, and how we can add on to that and improve will be the challenge for our business for this fiscal year.
Mr. Fishman: And about the this fiscal year on the 502 billion well Hum.
Mr. Fishman: And market is cool down and then there's a one time loss.
Mr. Fishman: Possibility accounting wise.
Mr. Fishman: This could be kind of a discussion.
Mr. Fishman: Well, we have as we had 202 billion are factored in for that so that included the 500 billion is thought to be the bottom and how we can add onto that it too will be a happy.
Mr. Fishman: The challenge for our business for this fiscal year.
Mr. Fishman: Okay.
Nishiyama: about the U.S. market and the impact of the tariff policies on demand. Well, as of May 20th, we will give you and a business update and we'll report on the details at that time but the EV market growth is slowing down and we have to shift our plan to a certain extent. So put it another way, hybrid, which is our strength. I think we can increase to what extent our production, a hybrid right now and does have product competitiveness to what extent. Incentive wise, hybrid. was less than $1,000. So that is the level of I am.
Mr. Fishman: How about the U S market and so.
Mr. Fishman: So being.
Mr. Fishman: But of the tariff policies on Tibet.
Mr. Fishman: Well either they try to you we will give you.
Mr. Fishman: And a business update and when we put out the details at that time, but E. B market. The growth is slowing down and we have to.
Mr. Fishman: Two shifts a part to certain extent.
Mr. Fishman: So put it the other way a hybrid which is a strength.
Mr. Fishman: I think we can increase to blend and extend our production our hybrid right now and that's had part of competitiveness to blend and extend is that it was hybrid.
Mr. Fishman: It's less than $1000. So there is a level.
Mr. Fishman: And so we want to expand our hybrid so as to it and it's North America clearly that the states are compete we think that we can compete and.
Nishiyama: So we want to expand our hybrid. So as to in in North America, including United States, and compete, we think that we can compete there. And so from 25 to 30, the automobile business Including preparing for birth, we want to control well and think about the resources to inject. And so that from the period from 2025 to 2030, it will be a transitional period, which will be very challenging. But we think our automotive business can expand. That is our current thinking.
Mr. Fishman: Jumps up from 25 to 30 of the automotive business.
Mr. Fishman: Yeah.
Mr. Fishman: That's a little bit of a law school anymore. He could again preparing for batch we wanted to drill a well and think about the resources to Jack and so that's kind of the period from 2025 to 30.
Mr. Fishman: Turkey, it'll be a transitional period, which will be very challenging, but we think our automotive business I can expand that is our current thinking.
Nishiyama: That's all for me. media Yes, okay. Yes, I think, yes. Well, just to add to the North America explanation, well, at the end of last fiscal year, the Passport FNCLX, we had rather fresh new models in place, and it's being well received. So, of that, plus, as Mr. Mimei has said, the hybrid Accord Civic CR-V, well, these models are still receiving a lot of high appraisal from our customers, and I think we can compete in the marketplace with these models. As of now, the North America market on the whole, Well, I think, just like last fiscal year, we think the market size will be more or less the same.
Mr. Fishman: That's all for me.
Mr. Fishman: Okay.
Mr. Fishman: No okay.
Mr. Fishman:
Mr. Fishman: Oh.
Mr. Fishman: Yeah, I know yesterday, yes.
Mr. Fishman: Just to add to that the North America exploration well at the end of last fiscal year. The password F. N C O X and we had and rather a fish you models in place and it's being well received so that plus.
Speaker Change: And as Dan said the hybrid.
Mr. Fishman: <unk> civic CRB.
Speaker Change: Well. These Muslims are still saving a lot of high appraisal for my customers I don't think we can compete in the marketplace with these mouse as of now.
Mr. Fishman: America, a bucket on the hull.
Speaker Change: Well I think.
Mr. Fishman: Just like last fiscal year, we yeah.
Mr. Fishman: Think of the market size will be born that's the same.
Nishiyama: But we have to think about the impact of the tariff policies on the total demand, as Mr. Mibe has said. So we have to adapt flexibly to the changes that take place and support sales.
Mr. Fishman: But we have to think about that the impact of the tariff policies and the total Tibet.
Speaker Change: As Mr beat their handset.
Mr. Fishman: Hum.
Mr. Fishman: So we have to adapt to flexibly to the changes that take place and it supports sales.
Operator: That is all. Thank you.
Mr. Fishman: That is all thank you.
Mr. Fishman: Okay.
Mr. Fishman: Thank you thank.
Operator: Thank you, Mr. Nishiyama.
Mr. Fishman: Thank you Mr Nishiyama.
Mr. Fishman: Next question.
Yokoyama: Next question.
Yokoyama: Toyo Keizai, Mr. Yokoyama, please. The equipment from Toyota, so can you hear me? Hello?
Mr. Fishman: Toyota So I missed the Oklahoma piece.
Mr. Fishman: Oh.
Speaker Change: The equipment for them to take so can you hear me Hello.
Mr. Fishman: Okay.
Yokoyama: Two questions, please. Question one is, you talked about, Mr. Miebe, about the years from 25 through 2030, and the tariff impact will continue on, not just this year, but next fiscal year. And I was... Oh, like a 8, 10% right for the IRS. And probably this year you have a one off one time transient amount. What is your target profitability in mind that you said that investment in Canada is to be suspended. But Mr. Trump is focusing on the earth.
Mr. Fishman: Two questions. Please.
Mr. Fishman: Push bond issue.
Mr. Fishman: Ah you talked about to.
Mr. Fishman: Let me be about the ears from 25 through 20, the Chi and the tariff impact will continue on its just this year, but next fiscal year and our Irish.
Mr. Fishman: Like H P.
Mr. Fishman: 10% right for the Irish and apparently this year you have a one off one time transient or.
Mr. Fishman: Wasn't steer target profitability in mind that you said that the investment in Canada has got to be suspended budge ambitious from.
Mr. Fishman: So focusing on the or at times, but net.
Mr. Fishman: In the future they will be the talk about the environment just how.
Mr. Fishman: How much airports would you like to make put a bunch of E Beach, and so do you like to revisit your targets or.
Mr. Fishman: Port for 2030, or Fortunately and I. Let you you would you give us your thoughts long term on that and the second question is about our human resources issue.
Yokoyama: And the second question is about human resources issue in April.
Yokoyama: Mr. Aoyama, the Executive Vice President, retired due to inappropriate conduct. And Mr. Aoyama had a very broad area to be looking after. And then this year he has been gone. And how would you like to address the loss of him? Of course, Kaihara-san is here. In a way, some have been promoted. How would you like to address the changes of those human resources?
Mr. Fishman: If you missed the OEM are the executive Vice President.
Mr. Fishman: At retired but due to inappropriate conduct and Mr. <unk> Mahajan, a very broad every year at you'd be looking after and then this year. He has been gone and how old you have to address the loss of a hammer and Oh.
Mr. Fishman: Of course, Oh restaurant this year in which some have been promoting and how would you like to address our the changes of others.
Mr. Fishman: So she's.
Eiji Fujimura: So Mr. Fujimura-san is going to explain the cruise path and then the air rest for myself. Thank you very much, Mr. Uematsu. It is a difficult question in a way because in the business update we would be able to give you some ideas about it. However, at high level for the BEV, we are going to delay Resources to invest and from 2025 to 40, for the carbon neutrality, targets, we need to have the battery EVs be prepared in terms of the number of the models or the volume to be appropriate. We will continue to prepare for that.
Mr. Fishman: So fish restaurant is going to explain the Frisch patent then the airbrushed.
Michelle: For myself Michelle Thank you very much Mr Grammar.
Michelle: It is a difficult are questioning the way because inhibition up they.
Michelle: We would be able to give you some ideas about it forever a as high level for the bed, we are going to delay the error.
Michelle: So she's a to invest and from 'twenty to 'twenty five to a four G for the couple of new trolley Chi.
Michelle: Charges try we need you have the E vs that'd be prepared in terms of the number of the models or the volume at should be appropriate we will continue to prepare for that.
Eiji Fujimura: And that will be of the level of a certain level of the efforts for the gross margin and R&D efforts and so on. But as for the gross margin up until the 2030, I shouldn't say too much because we anticipate a business update opportunity next round, but we are going to have new technology-based battery EVs, lots of prospective ones. And then the question is how much profitable it can be going forward. And then also we have made investment for the battery factories so far. And there are some negative areas that we could accept as well from that too.
Michelle: At that will be of the level of a certain a level of airports are for the gross margin and Darren Gee airports, So budge Ah I suppose the worst margin up until the 20th so cheap.
Michelle: She was going to say too much because we anticipate that business update of a gene next round, but we are going to have.
Michelle: New technology based or about your beach lots of perspective bonds and the other question is how much profitable. It can be going forward and then also we have a major investment for the bus. We are frustrated so far and are there are some.
Michelle: It gets you about areas that we could accept.
Michelle: Except as well from that your bet there must be a reach.
Eiji Fujimura: How much of a profit we can take, that's one thing. And then, as I said earlier, ICE models... with the current Forex of ¥150.00, the ICE model can get us ¥130.00 revenue, and the ECOFOREX is going to change, however we are going to... Unknown Representative, Shinji Aoyama, Unknown Attendee, Shinji Aoyama, Unknown Attendee, and we'll keep getting profit from ICE while doing that effort and ROIC ideally should be and then BEV's efforts and AVS-CB target for 2040, your question is about our target for that. And then in Trump's administration there are environment measures and the regulations have been Unknown Speaker, Unknown Translator, Eiji Fujimura, Masao Kawaguchi, Unknown Attendee, Shinji Aoyama, Honda Motor Especially with regard to the volume, it would not be the thing we would have to persist to going forward.
Michelle: How much of a perfect. We can take that one thing that as I said earlier, our Irish models.
Michelle: With the parent.
First of 150 N a the ice both tend to go to a show once for the Euro yen revenue and are the fresh is going to change. However, we are going to.
Michelle: Continue and a half to reduce of course are the Oh, I smuggled or import and then besides I like to make the Bev shop eat more comfort achieve with it extra generation multiples be outage.
Michelle: And will peak.
People are getting appropriate from ice whilst doing that airports and ROIC are ideally.
Michelle: It should be.
Michelle: Achieved a to be greater than the financial cost, 10% a really good target is.
Michelle: No change and are we need to have the 72 H a presenter Welsh to achieve that and then there's not just.
Michelle: Really for the 'twenty 'twenty six seven so on budget from 225 through 2030.
Michelle: We will manage them those are indicators are this way.
Michelle: And then Bam airports and a B C D target for 'twenty for Chi. Your question is about our targets for that and then in Trump's administration there are environments measures under.
Michelle: Regulations have been.
Michelle: Kind of retract Cheetah really ACC two and so on are however, though it is not a finalized are they roughly with a revisit them quite substantially and then a plus b hutch.
Michelle: Especially with regard to the volume.
Michelle: <unk> would not be the areas that we would have to persist to choose going forward. However, a full cup when they try to cheat the bev <unk> could be the optimal solution to achieve that.
Eiji Fujimura: However, for carbon neutrality, the BEVs could be the optimal solution to achieve it. That's the starting idea. by themselves, based on the competitions in the market, we need to allow that. and the best. will be, of course, be available from our company continually. We will continue to do that. But in the next five years, the U.S. market... would have a slower progress of the EV use. And then from 2030 onward, maybe we can accelerate our actions for the environment. But still, the final goal still stands, that is the carbon neutrality 2050. And then how we get there, what route we get there, we need to assess that once again, that carbon neutrality target in 2050 must stand.
Michelle: That'd be a good idea and Honda announced is there a series a beach earlier.
Michelle: We would like to push forward. The plans are as we are hedged or a condo regime of course, the volume may be a little bit down in terms of the.
Michelle: Production volume the bulk of the muscles are maybe a little bit less than we were anticipating but we need to continue on our airports are launching those production to stay competitive cheap and judge it was product or have to evolve them.
Michelle: But themselves are based on the competition in the market, we need to allow that.
Michelle: The Bev.
Speaker Change: Will be of course be available from our company continually we will.
Speaker Change: What you need to do that but it would be our next five years are the U S market.
Speaker Change: To have a slower progression of the E. B, a use and them from 2031 word maybe we can accelerate our actions for the environment.
Speaker Change: But still the final goal still stands that there's just a couple of niche rather G 20, food safety and then how we get there.
Speaker Change: What Roche, we'd get there are we need to assist us once again or a cup of neutrality target in 2015, most of the stuff and then we have to again, we assess the situation to be in 'twenty Pucci, and we'd anticipate people with the drive the cause for 10 years and then.
Eiji Fujimura: And then we have to, again, reassess the situations to be in 2040. And we anticipate people would drive the cars for 10 years. And then in 2040, we need to make the carbon neutrality kind of vehicles available. And I wouldn't say we are revisiting them substantially, but we need to look into the scenario from 2030 to 2014, given the environment in this period. And by 2030, I can say that electrification strategy needs to be revisited.
Speaker Change: In 'twenty airports, we need to make the carbon neutrality kind of vehicles are available and I would just say that we have is revisiting them.
Speaker Change: So, especially with it but we need to look into the scenario you're from 2032 20, a 14.
Speaker Change: Given the environment are you do you disappeared.
Speaker Change: And about 20 to 30.
Speaker Change: Say that Oh electrification, our strategy need to be revisit each of them.
Eiji Fujimura: And as for Mr. Aoyama, he has resigned from his position, and I really feel that we would like to extend our deep apology for troubling people such as customers, suppliers, shareholders, and our colleagues, all the stakeholders. And then, Mr. Kaihara is going to cover as the Executive Vice President, and Mr. Inoue is going to be the head of the automobile business division, and he is going to look into the air. operations of the area and each business domain is actually supported by the leading persons and I'm very sure that those human allocation will be good enough to keep going in a good way.
Speaker Change: And that's cool Mr. O M M D or he has a resigned from his position and.
Speaker Change: The.
Speaker Change: I really.
Mr. Inoue: Feel that a week or like to extend our apology for Trump link or are people such as our customers suppliers shareholders enter Oh colleagues all the stakeholders and then if the car is going to cover as the errors that 50, Vice President and Mr. Inoue.
Mr. Inoue: Is going to be.
Speaker Change: B the our head of the air automobile Vicious division and he is going to look into the air.
Speaker Change: Operations of that area and H I wish domain is actually supported by the Lady persons and I'm very sure that those.
Speaker Change: Our location will be good for them to keep going you know good way. Thank you very much.
Operator: Thank you very much. Thank you, Mr. Yokoyama.
Speaker Change: Thank you Mr. Oklahoma.
Speaker Change: Yeah.
Minamisawa: Are there any other questions? Thank you, TV Tokyo, Ui, please. Can you hear me? Yes. My name is Minamisawa.
Speaker Change: Are there any other questions.
Speaker Change: Yeah.
Speaker Change: Yeah.
Speaker Change: I leave.
Speaker Change: And the worst small water it would be cool to see bid.
Speaker Change: Tokyo three please.
Speaker Change: Yeah.
Speaker Change: [noise].
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: Can you hear me yes.
Speaker Change: Yes.
Speaker Change:
Speaker Change: My name is subject so I missed a question too.
Minamisawa: I'm substituting for Mr. Ui.
Toshihiro Mibe: A question to Mr. Mibe, the President. Well yesterday... and the U.S.-China have decided to reduce significant lead time, but U.S.-Japan negotiations, what are your expectations, if any, towards those negotiations? Well, about the U.S.-Japan negotiations, I mean, it's still ongoing.
Speaker Change: Maybe like I said.
Speaker Change: But yesterday.
Speaker Change: And the U S. China I have decided to reduce significant lead time that U S or Japan negotiations what are your expectations if any tourist those negotiations.
Speaker Change: But in the U S. Japan negotiations I mean, its still ongoing.
Toshihiro Mibe: Hi, everyone. to see that there is some global free trade because this will be the best for our business in the case of Honda We are not exporting from Japan to the U.S. in such a large volume, so there is little impact there, but USMCA... Well, we have the policy of to produce where the demand exists, and therefore, based on this policy, we have been doing global business, but Mexico, Canada, and United States, that is the USMCA. Based on this agreement, we are looking at this North America as one single market and build a supply chain in North America, including these three countries.
Speaker Change: Hum.
Speaker Change: We wanted to.
Speaker Change: Nobody's going to say that there is some global free trade because this would be the best for our business.
Speaker Change: In the case of Honda.
Speaker Change: We I'm not exporting from Japan to U S and in such a large volume. So there is little impact there, but U S. M C a well.
Speaker Change: Well, we have the policy of to produce where the demand exists and therefore based on this policy, we have been doing a global business and Mexico, Canada and United States.
Speaker Change: That is the U S M C H.
Speaker Change: Based on this agreement.
Speaker Change: Yeah.
Speaker Change: North America as one single market and build the supply chain in North America, including these three countries.
Toshihiro Mibe: And about the U.S. and Japan to have negotiated, it's not just limited to the United States. USMCA is the basis of our business and therefore we want the USMCA to be in place so that we can do business in a free environment, not just Mexico and Canada, but also for the American auto industry. I think this is the best answer, the best solution. So for us, We would.
Speaker Change: And.
Speaker Change: About the U S and Japan have negotiated it's not just limited to United States and U S. Embassy eight is the basis.
Speaker Change: Our business and therefore, we want the U S. M C eight to be in place. So that we can do this is in a free.
Speaker Change: Not just Mexico, and Canada, but also by the American or to any.
Speaker Change: Our industry I think this is the best chance that solution, so well for us.
Speaker Change: We want.
Toshihiro Mibe: Unknown Speaker, Unknown Translator, Shinji Aoyama, Honda Motor See that the free trade environment can be rebuilt. We want to approach the government and others so that this will be realized. In the past, we've been doing this, but we will continue to work to try to make this happen. Thank you.
Joe: To come Joe.
Speaker Change: Sure.
Speaker Change: You'll see that the free trade environment I can't be rebuilt.
Speaker Change: We want to approach the government and others. So that this will be realized in the past we've been doing this and we will continue to do it hum too.
Speaker Change: To try to make this happen.
Speaker Change: That itself.
Speaker Change: Alright.
Speaker Change: Yourself.
Operator: Thank you very much, Mr. Minamisa, and it's time for us to end.
Speaker Change: Thank you very much Mr. BW sells a car and you like Mcdonald's and they start vesting and it sounds to me like this.
Operator: With this, we'd like to conclude the Financial Results Press Conference. As for the materials that have been presented, please refer to them on our website. Once again, thank you for your participation.
Speaker Change: And I take you through the financial results press coverage and sort of a chance that that percentage. Please.
Speaker Change: Referred to them on our website once thought.
Speaker Change: Thank you for your participation.
Speaker Change: Okay.