Honda appoints Mahito Shikama as corporate transformation officer amid EV strategy reset

Business news

Tokyo‑based Honda Motor announced that Mahito Shikama, a 48‑year‑old Managing Officer at Honda R&D, will become the company’s Corporate Transformation Officer this summer. Shikama, who led the development of the e:HEV hybrid powertrain and the CR‑V’s new chassis architecture, will report directly to President Toshihiro Mibe and will head a cross‑functional task force aimed at restoring profitability after the automaker’s recent electric‑vehicle (EV) setbacks.

The appointment comes as Honda disclosed a ¥112 billion (US$720 million) operating loss for the fiscal year ending March 2025, its first loss since 2009. The shortfall was driven largely by the postponement of the $11 billion (¥1.6 trillion) Canadian EV plant, a slowdown in EV sales in Europe, and a sharp 23 % drop in Chinese sales YoY.

Market context

• EV market pressure: Europe’s new emissions‑performance standards, slated for 2027, will cut EU subsidies for Japan‑made EVs unless manufacturers meet a 30 % local‑content threshold. Honda’s current EV lineup, largely based on the Honda e and the partnership with General Motors, falls short of that benchmark.
• Competitive dynamics: Suzuki has overtaken Honda as Japan’s second‑largest automaker, largely on the back of its low‑cost, small‑car strategy in India. Meanwhile, Toyota and domestic rivals are accelerating battery‑swap and solid‑state projects, squeezing Honda’s market share.
• Capital allocation: Honda’s 2025‑2029 strategic plan earmarked ¥2.5 trillion for EV development, but the Canadian plant cancellation trimmed that budget by roughly 4 %. The company now expects to re‑allocate ¥300 billion toward hybrid‑electric (HEV) and plug‑in hybrid (PHEV) platforms, which still command a 45 % share of its global sales.

What it means

1. A shift from pure‑EV to a broader electrification mix

Shikama’s background in hybrid systems suggests Honda will double down on e:HEV technology, which already accounts for 38 % of its global fleet. By leveraging existing supply chains and the company’s in‑house battery‑management expertise, Honda can improve margins while still meeting tightening emissions targets.

2. Cost‑discipline and portfolio rationalisation

The transformation office will oversee a ¥150 billion cost‑reduction programme that includes:

• Consolidating three overlapping vehicle platforms into a single modular architecture by 2028.
• Reducing R&D headcount by 5 % and shifting 30 % of engineering resources to software and connectivity.
• Accelerating the shutdown of under‑performing models in Europe, notably the Civic hatchback, which posted a 12 % margin decline in 2025.

3. Strengthening the China recovery plan

China sales fell 23 % in the last quarter, prompting Honda to renegotiate joint‑venture terms with Guangqi Honda. Shikama will lead a ¥50 billion investment in locally sourced battery packs and a new compact EV platform tailored to Chinese consumer preferences for range‑over‑price.

4. Implications for investors

Analysts at Nomura now price Honda’s 2026 earnings at ¥1,200 per share, down from ¥1,350 prior to the EV pause, reflecting the anticipated dip in EV margins but offset by higher hybrid profitability. The stock has traded at a P/E of 9.2×, below the industry average of 11.5×, suggesting room for upside if the transformation delivers the targeted ¥200 billion net profit by FY2028.

5. Broader industry signal

Honda’s pivot underscores a growing consensus among legacy automakers: a balanced electrification strategy—mixing hybrids, plug‑ins, and selective BEVs—may be more sustainable than an all‑in pure‑EV bet, especially when global subsidies are in flux.

---

For further reading on Honda’s EV strategy and the European subsidy reforms, see the European Commission’s official proposal and Honda’s detailed earnings release here.