The profits have shrunk by 160 billion, and Japan's seven major automakers are in their darkest hour.

The net profits of seven major Japanese automakers are expected to decline by 48% in fiscal year 2026 compared to the historical high.

According to a report by Nikkei Asia on May 20th, the profits of the Japanese automotive manufacturing industry have shrunk significantly. The profits in fiscal year 2026 (from April 2026 to March 2027; different companies may have different names, hereinafter referred to as fiscal year 2026) may be nearly halved.

Report from Nikkei Asia

The report mentioned that seven major Japanese automakers, including Toyota, Honda, Nissan, Suzuki, Mazda, Subaru, and Mitsubishi Motors, are expected to achieve a total net profit of 3.9 trillion yen (approximately 167.548 billion yuan) in fiscal year 2026. This figure represents a significant 48% decline compared to the historical high of 7.54 trillion yen (approximately 323.926 billion yuan) in fiscal year 2023, a reduction of 3.64 trillion yen (approximately 156.378 billion yuan).

The significant profit shrinkage of these seven major Japanese automakers in fiscal year 2026 is not a short - term accidental fluctuation but a continuation and amplification of the operational difficulties in the previous fiscal year.

In fiscal year 2025 (from April 2025 to March 2026; different companies may have different names, hereinafter referred to as fiscal year 2025), the profitability of major Japanese automakers continued to weaken, and many companies reported losses.

Among the top three Japanese automakers, Honda reported its first loss in nearly 70 years since its listing. The loss amounted to 414.3 billion yen (approximately 17.72 billion yuan), compared with a profit of 835.8 billion yen (approximately 35.747 billion yuan) in the same period of the previous year.

Honda's performance in fiscal year 2025

Nissan reported a loss of 533.1 billion yen (approximately 22.801 billion yuan) in fiscal year 2025. Although this was a narrowing of the loss compared to the 670.9 billion yen (approximately 28.694 billion yuan) loss in fiscal year 2024, it still marked two consecutive years of huge losses.

Nissan's performance in fiscal year 2025

Toyota's net profit in fiscal year 2025 was 3.85 trillion yen (approximately 165.4 billion yuan). Although there was no loss, it decreased by approximately 916.9 billion yen (approximately 39.216 billion yuan) compared to the net profit of 4.77 trillion yen (approximately 204.924 billion yuan) in fiscal year 2024, a year - on - year decline of 19.2%.

Toyota's performance in fiscal year 2025

Among Mazda, Subaru, and Mitsubishi Motors, the net profits in fiscal year 2025 declined by 69.2%, 73%, and 76% respectively compared to fiscal year 2024. Among the seven major Japanese automakers, only Suzuki's net profit attributable to shareholders increased by 5.6% in fiscal year 2025.

Facing the dilemma of a cliff - like decline in profits and a drastic change in the industry's competitive landscape, the seven major Japanese automakers, including Toyota, Honda, and Nissan, have tightened their operational strategies.

Toyota mentioned in the Q&A session of its fiscal year 2025 financial report that it will accelerate the delivery of hybrid models, streamline model variants to avoid over - complication, and shift from "laying the foundation" to "improving efficiency". It will collaborate with suppliers and will not set specific numerical targets but will rebuild a sustainable profit system.

Honda previously announced the cancellation of the R & D and market launch of three planned pure - electric models in North America and will re - evaluate its electrification strategy. At the same time, some executive directors of Honda voluntarily returned part of their monthly salaries.

Nissan will continue to implement the Re:Nissan strategy, driving sales and profitability through cost - cutting, production optimization, and a more targeted new - energy - driven strategy in China.

Overall, the continuous decline in performance, weak global demand, and the electrification transformation have put multiple pressures on the Japanese automotive industry, leaving it in the throes of transformation. The effectiveness of the new - energy transformation and the pace of the recovery of global terminal sales will directly determine whether Japanese automakers can emerge from the profit trough.

This article is from the WeChat official account "CheDongXi". Author: Zhang Rui, Editor: Zhi Hao. Republished by 36Kr with permission.