The Japanese automaker posted a loss of 414.35 billion yen ($2.62 billion) for the fiscal year (ended March 31) against a profit of 1.213 trillion yen ($7.67 billion) a year earlier. The net loss reached 433.94 billion yen ($2.75 billion), while the company made a net profit of 835.84 billion yen ($5.29 billion) in the previous year, investing.com reported.
Honda’s revenue rose 0.5% to 21.797 trillion yen ($137.9 billion).
The company attributed the drop to a large-scale write-down of assets in the electric vehicle segment. In March, Honda warned of costs and losses of up to 2.5 trillion yen ($15.8 billion) due to a review of its EV business strategy.
The automaker said it had abandoned the launch and development of a number of models due to weakening demand for electric vehicles in North America. In addition, Honda wrote off some investments in China amid increasing competition in the local market.
Despite the losses, the company expects to return to profitability in the current fiscal year and forecasts an operating profit of 500 billion yen ($3.16 billion). Honda’s main bet is on the growth of sales of cars with traditional engines and hybrids in North America.
Honda sold 3.4 million vehicles for the year, down 8.9% from a year earlier. In contrast, sales of motorcycles and other two-wheeled vehicles grew by 7.4% to 22.1 million units.
The company attributed the decline in automobile sales to falling demand in China, as well as rising prices due to U.S. import tariffs.
