Core Viewpoint - Honda Motor's stock has shown limited growth, with a 2% increase since the start of 2023, and recent financial results have been disappointing, particularly in Q4 FY'25, where revenues fell to $35.1 billion from $36.5 billion the previous year [1][2] Financial Performance - For Q4 FY'25, Honda's revenues were approximately $35.1 billion, a decline from $36.5 billion year-over-year, and profits also did not meet expectations [1] - The company sold 1.65 million vehicles in North America in FY'25, a slight increase from the previous year, aided by a rise in hybrid vehicle adoption [1] - Honda has projected a net profit forecast for 2026 that is expected to be 70.1% lower than FY'25, with revenues anticipated to decline by 6.4% year-over-year [2] Market Challenges - The 25% tariff on foreign automotive imports imposed by the Trump Administration is expected to impact Honda's U.S. operations, prompting the company to consider producing its next-generation Civic hybrid in the U.S. instead of Mexico [2] - Honda's sales volumes in Asia decreased by nearly 28% year-over-year in FY'25, indicating challenges in maintaining competitiveness in the region [3] - The strengthening of the yen, which has appreciated almost 8% against the dollar in the past year, could negatively affect Honda's export competitiveness and international earnings [3][4] Valuation and Investment Outlook - Honda's stock is trading at approximately 8x FY'25 earnings, suggesting a reasonable valuation, supported by ongoing share repurchase programs and potential growth in the hybrid sector [4] - The current stock valuation is estimated at around $32 per share, slightly above the present market price [4]

Core Viewpoint - Honda is planning to significantly expand its manufacturing operations in the US in response to new auto tariffs imposed by the Trump administration, aiming for 90% of its US sales to be produced domestically [1][4]. Group 1: Manufacturing Expansion - Honda intends to increase its US production capacity by up to 30% over the next two to three years [2]. - The company plans to shift production of key models, including the CR-V SUV from Canada and the HR-V SUV from Mexico to US facilities [6]. - Honda is also set to manufacture the next-generation Civic hybrid in Indiana instead of Mexico [6]. Group 2: Market Importance - The US market is crucial for Honda, accounting for approximately 40% of its global sales, with around 1.4 million vehicles sold in the US last year [5]. - In the first quarter of this year, Honda's US sales increased by 5% to nearly 352,000 vehicles [5]. Group 3: Industry Response - Honda's strategy reflects a broader trend among automakers to adjust production plans due to the 25% tariff on imported vehicles, with other companies like General Motors and Nissan also ramping up US production [4][7]. - The reshuffling of production is part of a larger reshoring trend in the US manufacturing sector, driven by rising costs and supply chain concerns [14][15].