For The First Time In 70 Years Honda Made A Loss

Honda Motor announced that for the first time in nearly seven decades of operating as a public company, it recorded an annual loss.

The reasons are primarily found in the high costs of business restructuring in the electric vehicle (EV) sector, reports Reuters.

The company said the costs of reorganizing its electric vehicle business exceeded $9 billion, which is why it abandoned its long-term goals of developing and selling electric cars.

Honda General Manager Toshihiro Mibe stated that the company no longer plans for electric vehicles to make up 20 percent of total sales by 2030, nor to completely switch to electric vehicles and fuel cell models by 2040.

At the same time, Honda suspended an investment project in Canada worth 11 billion dollars for the production of electric vehicles and batteries for an indefinite period of time.

The company’s operating loss in the fiscal year ending in March was 414.3 billion yen (about $2.63 billion), while a year earlier it made a profit of 1.2 trillion yen (about $7.6 billion).

The company expects to return to the profit zone this year thanks to austerity measures and strong motorcycle sales, especially in the Indian and Brazilian markets.

Honda also warned that the rise in raw material prices and geopolitical tensions in the Middle East could further affect its operations in the coming period.

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