Honda Motor Company, Ltd.

Thank you for taking time to attend Honda's financial results press conference for the fiscal year ended March 31st, 2025.

First, the executives in attendance.

Director, President, and Representative Executive Officer Toshihiro Mime.

Hello.

Thank you. Director, Executive Vice President and Representative Executive Officer Noriya Kaihara. This is Kaihara. Thank you for joining. Director, Managing Executive Officer Eiji Fujimura. This is Fujimura. Thank you. Mr. Mibe will give a summary of the financial results, followed by Mr. Kaihara's explanation of results of the fiscal year ended March 2025 and 2026, as well as shareholders' return. Mibe Blasan, please. Thank you for your continued understanding of Honda's business activities. The financial results for the FYE March 2025 and the outlook for FYE March 2026 are as follows. First summary of the financial results. Operating profit for the FYE March 2025 was 1 trillion 213.4 billion yen. In the fourth quarter of the same fiscal year, we changed the accounting method for automobile product warranty provisions. This one-time expense excluded operating profit was 1 trillion 341 billion yen. Motorcycle business saw strong unit sales globally, achieving record highs in unit sales, operating profit and operating profit margin. Automobile business saw a decline in unit sales mainly in China and ASEAN and was impacted by increased North American incentives for EVs. However, hybrid EV sales expanded. Operating cash flow after R&D adjustments, which represents the source of future investment, remained as high as last fiscal year, reaching 2 trillion 800 billion yen. On consolidated financial results for FYE March 2026, the impact of tariff policies is huge, combined with frequent revisions making it difficult to formulate an outlook. However, reflecting the full 12-month impact as well as recovery measures, we have set the minimum levels of operating profit at 500 billion yen and net profit at 250 billion yen. Motorcycle business plans to sell 21.3 million units and increase year-on-year. Automobile business, despite significant tariff impact, hybrid EV sales will be boosted, mainly in North America. Moving forward, the impact of tariff policies will be carefully assessed, recovery measures enhanced, while aiming for increased operating profit. Regarding shareholder returns, at today's Board of Directors meeting, a dividend policy change was decided. To improve capital efficiency and ensure stable shareholder dividends despite uncertainties, we will switch from the conventional payout ratio to DOE. Annual dividend will increase 2 yen from 68 yen into 70 yen per share. Next, motorcycle and automobile business initiatives that support a stable revenue base. The motorcycle business is world number one in market share, with annual sales of over 20 million units. Sharing platforms and powertrains combined with skill of merit of dominant unit sales allows for a low-cost structure that surpasses other companies and thereby realized profit expansion. In automobile business, hybrid electric vehicle system costs have been reduced while enhancing marketability. The current model of profitability is 1.5 times the previous model. Unit sales have expanded globally, in particular North America. In the latter half of this decade, we plan to introduce next-generation HEV models to evolve performance and cost efficiency. Next, initiatives for enhancing corporate value. Last fiscal year at this meeting, I explained our efforts to enhance corporate value in the past, present, and future. Regarding past capital optimization efforts, the prospect is in sight as a result of last December's decision to repurchase 1.1 trillion yen of our shares. Meanwhile, looking at the present and future, the automotive industry environment has changed dramatically, requiring more than ever flexible response. Regarding automobile profitability, we will secure stable revenue through increased unit sales of hybrid EVs with better profitability, especially in North America, plus solid business foundation of our motorcycle and financial business. Looking ahead, the electric vehicle market growth has slowed down more than expected. We reviewed timing of our comprehensive value change project in Canada and decided to postpone our large-scale investments. Details of the electrification strategy trajectory change will be explained in our business update on May 20th. Despite the continuing uncertainty in business environment, Honda will maintain stable management through a resilient business portfolio by flexibly revising strategies according to market conditions, thereby enhancing corporate value. Next, Mr. Kaihara will give details of the financial results.

I will explain the results of the fiscal year ending March 2025, the outlook for FYE March 2026, and shareholder returns. First, regarding the group sales volume for FYE March 25, for motorcycle businesses, 20.572 million units sold, mainly due to increase in Asia year-on-year. For automobile businesses, 3.716 million units sold with a decline of volume in Asia or mainly in China. And for power production businesses, 3.7 million units sold with a decline mainly in Europe. Next, regarding the consolidated financial results for FYE March 25, starting from the FYE March 25, we changed the method of measuring product warranty provisions to allocate for the sales of major automotive production sites so that they are measured comprehensively at the time of the sale. While this results in a one-time expense for FYE March 2025, it will allow us to limit the impact of product warranty expenses on earnings volatility from this fiscal year onward. Such one-time impact has been reflected on the operating profit of the fiscal year, which marked 1.2134 trillion yen. That was 168.4 billion yen short of the previous period. Equity in earnings of affiliates was 900 million yen, down by 109.8 billion yen, mainly due to the decline in sales volume in China. Net profit attributable to the owner of the parent decreased by 271.3 billion yen, totaling 835.8 billion yen. As Mr. Mibe explained in the beginning, the results excluding the impact of the change in product warranty estimates in automobile businesses, are shown on the right-hand side of the slide. Next, regarding factors of ups and downs of operating profit for the FIE March 2025 year-on-year, operating profit was 1.3413 billion yen, down by 40.8 billion yen year-on-year, before reflecting the impact of the change in product warranty estimates for the automobiles. The factors behind have been a 233.6 billion yen decline in profit due to sales impact, increase of 525 billion yen in profit due to price and cost impact, 85 billion yen decline in profit due to miscellaneous expenses, 153.5 billion yen decline in profit due to research and development expenses, and 93.6 billion yen decline in profit due to the forex impact. Regarding the operating profit by business segment, for motorcycle businesses, operating profit was 663.4 billion yen, automobile businesses, 243.8 billion yen, financial services businesses, 315.6 billion yen, and power products and other businesses, 9.4 billion yen operating losses. Regarding the factors of ups and downs for motorcycle business performance, the operating profit marked the record highest of 663.4 billion yen, up by 107.2 billion yen year-on-year. With factors behind, particularly of the sales impact, additional 48.1 billion yen was made, mainly due to sales volume increase. For price and cost impact, additional 175.3 billion yen was made due to improved product value and effective pricing in response to the inflationary impact caused by depreciating currencies in emerging markets. 20.1 billion yen decline in profit due to miscellaneous expenses. 21.5 billion yen decline in profit. due to research and development expenses, and ¥74.6 billion decline in profit due to foreign currency. Regarding factors of automobile businesses operating profit before reflecting the impact of change of the estimates, profit declined by ¥189.1 billion year on year, resulting in ¥371.5 billion Sales impact, a profit declined by 333.7 billion yen due to sales volume reduction and increase of incentives to boost EV sales. For price-cost impact, a profit increased by 336.5 billion yen due to pricing effect that commensurate with improved product values. Expenses, profit declined by 38.2 billion yen. For research and development expenses, profit declined by 127 billion yen, mainly due to increased resources allocated mainly to EV. Currency exchanges, profit declined by 26.7 billion yen. Regarding the cash flow situations, for FYE March 2025, the free cash flow of the operating companies excluding the financial services businesses was 665.8 billion yen. Net cash balance at the end of the period was 320 yen. 215.7 billion yen, and finally operating cash flow post R&D adjustment was 2,806.6 billion yen. And the consolidated earnings forecast for the fiscal year ending March 2026, regarding the group's sales volume year-on-year, for the second businesses, 21.3 billion units are expected, reflecting an increase in AGM. Automobile businesses at 3.62 billion yen units expected reflecting decrease mainly in Asia, and the power product at 3.67 million units expected reflecting the decrease mainly in North America. Regarding the consolidated earnings outlook for the FYE March 26, operating profit is projected to be 500 billion yen, and net profit attributable owner of the parent company is 250 billion yen. Forex assumption is set at 135 yen for U.S. dollar throughout the year. Regarding factors behind expecting operating profit year on year, the operating profit is expected to be 1,402,000,000 yen, excluding the impact of the exchange rate and tariffs, which is to maintain the same level as previous fiscal year. For its impact, 452,000,000 yen decline in profit is expected, anticipating depreciating currencies of the emerging markets. to the U.S. dollar, and the impact of the tariff is still being examined. However, the potential impact, to the best of the knowledge as of now, are incorporated in the forecast. A force to mitigate the impact of the tariffs is projected to be 200 million yen. And to explain the factors behind the Apple comparison year on year. Due to sales impact, profit will go up by 156.1 billion yen with sales volume increase of motorcycles and automobiles in North America. Regarding price-cost impact, profit will be up by 250 billion yen due to price impact. with improved product values. Expenses increased by 219.1 billion, reducing profit. Research and development expenses increased by 126 billion yen, decreasing the profit. The forecast of capital investment, depreciation, research and development spending, FY26 is in the slide. Regarding shareholder returns, Honda positions returning value back to shareholders as a top management priority. Starting FYE March 26, we will change our dividend policy and will introduce DOE as a return indicator. We will strive to pay out aiming for 3%. Despite the business environment being uncertain, we will realize more stable and continuous returns. For FYE March 25, the year-end dividend is determined at 34 yen per share, and annual dividend at 68.68 yen per share. And for FYE March 26, expected dividend is to be 70 yen per share, up by 2 yen from the year before. Regarding the share buyback of about 1.3 billion yen that we made a decision on, on December 23rd, 2024, we have acquired the equivalent of about 589.5 billion yen worth of the shares as of April 30th, 2025. That concludes my explanation. Thank you very much for your attention.

Thank you very much for your listening. And now we would like to proceed to Q&A.

And please use the Zoom link that has been provided to you beforehand. In the interest of time, please limit your questions to two per person. When asking, please turn on your camera and microphone. Those of you who have questions, please indicate so with the raise hand button, please.

The first question from Nikkei.

Mr. Okinaga, please.

This is Okinaga from Nikkei.

Thank you.

USMC, about the task. For the time being, there were to be exceptions, but you have added on 650 billion yen. So what is the reason for this, and what is the breakdown? Can you explain? That's the first question. And the second question, about the postponement in Canada. Can you explain about the reason for that?

Well, first, about the TAF.

Yes, we have estimated at 650 billion yen, but finished cars and components included, the TAF is very complicated, and the calculation that we have done and the basis for this calculation, I think you've seen this, but for the finished cars, from Canada to the United States, also from Mexico to U.S., and from Japan to the United States. There are different tariff conditions that needed to be taken into consideration, and the result is shown on the right-hand side. And also about the components, Well, USMCA, if it's within the USMCA, the components are exempt. But there's from Tier 1, Tier 2 to Tier 3 components. And therefore, we need to have the country of origin certification. And this is not fixed yet. So 25% is being included because we have yet to obtain the certificate. So this included is $250 billion. And the motorcycle business is written under. There is an impact. So it's a 30.6 billion yen impact. And power products, again, about 24.3 billion yen. So all added, it comes to 650 billion yen. Well, this is the minimum, the bottom. And, well, I think the traffic impact will continue to change as time goes by, and we have to think about these major changes taking place. Well, in the middle, we talk about the automobile parts here in the middle here. And there are parts which are exempt from the tab, but the amount and volume has not yet to be looked into. So it's included, 25%. And this is said to be 220 billion yen. So these are the amounts that we have calculated. But if we scrutinize and come up with the details, there will be a number of components which will be exempt. So again, 500 billion, how much can be added on is something that we have to look into. So the operating profit of 500 billion, this is the bottom, the minimum.

So please understand this number to mean that way.

how we're going to respond to these tariffs, that included. We want to make a recovery from this 500 billion. About the specifics of how we will be responding, well, up until March, Canada, Mexico exports. We want to promote this and build up the inventory in the United States. And we have been taking such measures up to that time. And in the short run, internally, we want to reduce our costs, thoroughly reduce our costs. And in addition to that, the allocation of the finished products, we want to optimize. So this has been reported in the newspaper, the Civic five-door hybrid, which is being produced in Yori. There are other components. So up until June, September, they'll be produced in Japan. But then after, we'll be transferred to Indiana. And HCM, the Canada CRV for the United States, ELP. will be producing instead in the United States. So we are thinking about the production allocation, optimizing the allocation where possible. And also for the dealers and suppliers, stakeholders, we are co-creating so as to minimize the impact of tariffs. And about the prices, well, we have to observe what competitors are doing and think about the revision range and which models for which we will revise our prices. So we want to be careful and carefully observe what is happening. If the tariff measures are to be in place for a long time, then we will have to increase production capacity in the United States. We've already began studies on this. First, we have to think about the capex. Well, in the United States, well, they have a two-shift, but maybe we can increase to three-shift production and also operating over the weekend. There is room to increase the production capacity in the United States, and we are trying to look into what will happen as a result of that. And then after will be the CAPEX, capital expenditure. But at any rate, we have to secure workers and to think about the impact on the supply chain because it will be huge. We want to observe what is happening and, at the appropriate timing, think what needs to be done. We want to be prudent in such efforts in dealing with tariff measures. About the Canada case. On April 25th, we have made the announcement, and the EV, the 240,000 battery, 36 gigawatt per hour, and also the POSCO future, and Asahi Kasei, the joint venture. So Canadian dollar, 15 billion worth of investment, and it was planned to restart operation in 2028. We did make that announcement back then. This was thinking that EV demand would increase in the future, and we have to think about the upstream resources and the downstream service. And we wanted to enhance our Canada value chain so as to create the electrification business in the future. But as you know, in North America, the EV market growth is slowing down. So as of now, we think that we should postpone for at least two years. This has been decided. USMCA, we are thinking that this will not change, USMCA. If the conditions were to change, at that point in time, we have to revisit this. As for the specifics, what happens after two years and the starting time of the project, we have to observe what is happening and ultimately make the decision. We are consulting with the Canadian government and Ontario province, and as for this postponement, we have already received their consent. That is all from me. Anything to add?

Well, yes.

We have provided some additional information, and we have included the premises for the tariff calculation estimation. We have looked at other competitors' information that have been disclosed, and I think the condition setting is quite different company by company. And so we're wondering how we should be looking at this. And so we've included this summary. Well, the Japanese companies over the past week or so have been announcing different things, including or not including certain factors at GM and Ford. For example, they've disclosed information. And looking at what they're doing, it's a nine-month impact because they closed the books in December. So they're looking at 4,000, 5,000 billion, nine-month impact. And so annually, it will come to some 500 billion yen. Of the 650 billion, as Mibe has said, we have motorcycle business, excluding it's about 500 billion yen. So it's more or less – so I think they are 900, whereas we are 500. And Ford also, they have a high ratio of U.S. production. And so likewise, if you calculate in terms of – 12 months, it's 450 billion. So it's close to our number. In Japan, the analysts are calculating the net impact, and it's about 300 billion, but we are 450 billion. So they're saying that ours is high, the impact. We are high by 150 billion versus because the motorcycle BP and also the components have impact. As we've explained, well, USMCA and whether we can comply or not on the components level is not clear to us. We have to look into the details. And therefore, we have conservative in terms of including this and from Mexico. of the imports from Mexico. There's Prolog, the battery EV from GM, and this is also included. So I think this is the reason for this difference. So $450 billion appears to be quite big, but I think compared to other OEMs or the media analysts, though there is a slight gap, I think we are more or less thinking about the same image. So we've added a summary of our estimation assumptions for your reference.

Thank you very much, Mr. Okinaga.

So next question. Yomiuri newspaper, Mr. Narahashi, please. I have two questions. One, as Mr. Fujimura said earlier, competitors estimate or not estimate the impact by the tariff. However, you decided to disclose your estimates in detail. What is your intention by doing that? And second question is about a relationship with Nissan. You had – well, they had – well, those talks were broken up because of business situations over there, but they have announced to make a – recovery plans and it is difficult for them to survive being alone. However, what is the relationship with them going forward? Would that be the collaborative relationship or any business integration talks? Be back again. So let's start with the tariff by Mr. Fujimura and Nissan for myself. So thank you very much for your question. So we decided to disclose our assumption because the forex and business economic environments are many uncertainties in those areas. But despite that, we decided that it would be the guideline like this because this is something we should do as a business company. and there are areas which is very very uncertain and still we decided to look into the air situation as far as we could assess and of course the interpretation of the taxation law is difficult too and we had our own interpretation with the help of the area american hunter representative too, and estimated impact on the annual business. We decided to assess that and share that with people outside. And even in the company, we could have a better understanding of the potential impact internally. In the short term, midterm, long term, we could come up with a kind of mitigation measures. And then there are things we could do internally as a mitigation, or things which can collaborate with the supplier, or we could look for the way to speak to the authority, the politics, for instance. And there can be those potential mitigation measures that we could think of and then put them on the table. And then it is a big negative impact, really, and that would give negative impressions in a way to you. However, this is the worst-case scenario. Then we can then try to find out what we could do going forward. I'm not sure if I answered your question. However, this is what we have in mind in disclosing such estimate to you. So 500 billion, that's the assessed amount. And in order to make it kind of more reasonably accepted number, we decided to share with you those tables with you. to understand better about it. And then with Nissan, as of the 13th of February, I will disclose to you about our decision not to go for it. And there is no further progress after that. And besides, we have the strategic partnership MOU that was entered in August last year, which includes Mitsubishi Automotive. And we continue to work on that to try to maximize the collaboration efforts, anticipating the joint research for the next generation platforms and the – or commonize the platforms and the environmental circulation, energy resources, and so on. And those areas are being assessed as well. Once again, in greater detail. And also today, we are in very different environments too, including a tariff situation too. And we are thinking about further collaboration potential in the new environments. And again, the business integration talks will not be on the table for more while going forward. However, we need to try to maximize the benefit out of the collaborative efforts besides – and we'd like to go on with this strategic partnership. so that we can find out new directions for the growth of the businesses so that we can gain the competitiveness to lead the industry going forward, and we will make progress in that regard. So that is all for Nissan. Thank you very much. Thank you.

Thank you very much, Mr. Narahashi. And next question is from Asahi Shimbun, newspaper Nishiyama, please.

Can you hear us? Yes, sorry. Yes.

I'm Nishiyama from Asahi Shimbun newspaper. I have two questions. The first question, for the next fiscal year, your outlook, well, you've given the explanation, but overall, Well, I think the profit is quite going to be dropped or declined. But what is your view on this, Mr. Mibe? And you said that you're going to take various measures to make a recovery. Can you talk about the specifics? And secondly, about the unit sales outlook. Well, I... Well, the motorcycle was a positive, but there will be a drop in demand due to the Trump tariffs. So what about incentives? I think that there is a race for incentives. So what are the measures they're going to take? Well, you said that you don't want to add this on to the prices, but still, well, I think you have to compare yourself to the competitors, but what are your thoughts on this? About your first question about outlook, well, looking at the previous fiscal year, well, I talked about the new provision, the comprehensive warranty provision, and also the EV provision with GM. We have about 1.1 trillion operating profit. So I think it is more or less online, the automobile. So there is a drop of 43 million units, including the 21,000 United States. So we think that we can ensure this much profit. And also – and so – The motorcycle, 660, and power product, 310. So we are generating a 1 trillion yen profit. For the automobile, it's a little less than 400 billion. But for BEV, the gross profit is minus 200 billion, and RD is minus 400. So BEV is minus 600 billion. And ICE, including hybrid, is about 1 trillion yen. profit. So it is such a business. And automobile ICE and motorcycle and financial services, we will earn profit there and continue investment for electrification plus the investors' return. And we have tried to balance this, and this was the case in the previous fiscal year. And now about the 102 key, as I said, we are looking at 135 yen against the dollar. This is quite conservative, but still 135 yen. So it's about 450 billion negative from 150 yen, and also there is the recovery of 200, and so net is 450 billion. And altogether – well, there are – this is based on the information that we have locally, but as Mr. Fujimori said, the USMCA-compliant parts are zero as of now, and we think that there'd be less of an impact as a result of this. In the first quarter, I think that we can enhance the precision of our calculation, and with the recovery measures, we want to try to reduce the impact. And so, well, it's just if about the currency and TAF impact. Had we not had this, I think it will be more than our previous fiscal year. We do have the capability to generate the same operating profit. So how we exclude and recover from the impact of the tariff policies and to what extent we can do this. We'll determine how much of an improvement we will see for this fiscal year. And about this fiscal year, the 500 billion, well, the market is cooled down, and there's a one-time loss possibility. Accounting-wise, this could become a discussion. So, well, we have 200 billion dollars. factored in for that. So that included the 500 billion is thought to be the bottom. And how we can add on to that and improve will be the challenge for our business for this fiscal year.

About the U.S.

market, and so the impact of the tariff policies demand, well, on the May 20th, we will give you A business update, and we'll report on the details at that time. But EV market growth is slowing down, and we have to shift our plan to a certain extent. So put another way, hybrid, which is our strength. I think we can increase to quite an extent our production. Our hybrid right now does have product competitiveness to quite an extent. Incentive-wise, hybrid... It's less than $1,000. So that is the level. So we want to expand our hybrid so as to, in North America, including the United States, compete. We think that we can compete there. And so from 25 to 30, the automobile business, including preparing for BEV, We want to control well and think about the resources to inject so that from the period from 2025 to 2030, it will be a transitional period which will be very challenging, but we think our automotive business can expand. That is our current thinking.

That's all from me. Anything else?

No?

Okay. Do you have something? Yes.

Well, just to add to the North America explanation, well, at the end of last fiscal year, the passport FNCLX, we had rather fresh new models in place, and it's being well received. So of that, plus, as Mr. Mimei has said, the hybrid, Accord, Civic, CRV, Well, these models are still receiving a lot of high appraisal from our customers, and I think we can compete in the marketplace with these models. market on the whole. I think just like last fiscal year, we think the market size will be more or less the same, but we have to think about the impact of the tariff policies on the total demand, as Mr. Mimei has said. So we have to adapt flexibly to the changes that take place and support sales. That is all. Thank you.

Thank you.

Thank you, Mr. Nishiyama.

Next question.

Toyo Keizai. Mr. Yokoyama, please.

Yokoyama from Toyo Keizai.

Can you hear me? Hello? Two questions, please. Question one is, you talked about the years from 2025 through 2030, and the tariff impact will continue on, not just this year, but next fiscal year. And I was like eight, ten percent right for the IOS. And probably this year, you have a one-off, one-time transgender What is the target profitability in mind? You said that investment in Canada is to be suspended, but Mr. Trump? He's focusing on the earth. But in the future, there will be the talk about the environments as well, but how much effort would you like to make for the battery EVs? And would you like to revisit your targets going forward for 2030 or 40? And I'd like you to give us your thoughts for the long-term span. And the second question is about human resources issue in APO. Mr. Aoyama, the executive vice president, had retired due to inappropriate conduct. And Mr. Oyama had a very broad area to be looking after, and then this year he has been gone. And how would you like to address the loss of him? And, of course, Kai Hara-san is here. Inoue's son have been promoted. And how would you like to address the changes of those human resources? So Fujimura-san is going to explain the first part and then the rest I will for myself, by myself. Thank you very much, Mr. Koyama. It is a difficult question in a way because in a business update we would be able to give you some ideas about it. However, at high level for the BEV, we are going to delay the resources to invest from 2025 to 2040 for the carbon neutrality. targets, we need to have the battery EVs be prepared in terms of the number of the models or the volume to be appropriate. We will continue to prepare for that. That will be of the level of a certain level of the efforts for the gross margin and the efforts and so on. But as for the gross margin, up until the 2030 I shouldn't say too much because we anticipate a business update opportunity next round, but we are going to have new technology-based battery EVs, lots of prospective ones. And then the question is how much profitable. it can be going forward. And then also we have made investment for the battery factories so far, and there are some negative areas that we could accept as well from that too. But battery EVs, how much of a profit we can take, that's one thing. And then, as I said earlier, ICE models, With the current forex of 150 yen, the ICE model can get us 130 yen revenue. And the forex is going to change. However, we are going to... continue and have to reduce, of course, of the ICE models going forward. And then, besides, I'd like to make the BEVs a bit more competitive with the next-generation models be added. And we'll get a profit from ICE whilst doing that effort, and ROIC, ideally. should be achieved to be greater than the financial cost. 10% ROE target is no change, and we need to have the 7% to 8% ROEs to achieve that. And then it is not just really for the 2026, 2027, and so on, but from 2025 through 2030, We will manage those indicators this way. And then BEV's efforts and ABS-CV target for 2040, your question is about our target for that. And then in Trump's administration, there are environment measures and regulations have been kind of retracted with ACC2 and so on. However, though it is not finalized, they probably would revisit them quite substantially. And then the plus we had, especially with regard to the volume, would not be the error that we would have to persist to going forward. However, for carbon neutrality, the BEVs could be the optimal solution to achieve it. That's the starting idea. And Honda have announced the Zero Series AVs earlier. And we would like to push forward the plans as we had planned already. Of course, the volume may be a little bit down in terms of the production volume. The number of the models may be a little bit less than we were anticipating, but we need to continue on our efforts launching those products to stay competitive. And those products have to evolve by themselves based on the competitions in the market. We need to allow that. And BEVs will be, of course, be available from our company continually. We will continue to do that. But in the next five years, the U.S. market would have a slower progress of the EV use. And then from 2030 onward, maybe we can accelerate our actions for the environment. But still, the final goal still stands. That is the carbon neutrality 2050. And then how we get there, route we get there. We need to assess that once again, but carbon neutrality target in 2050 must stand. And then we have to, again, reassess the situations to be in 2040. And we anticipate people will drive the cars for 10 years, and then in 2040 we need to make the carbon neutrality kind of vehicles available. And I wouldn't say that we are revisiting them substantially, but we need to look into the scenario from 2030 to 2014, given the environment in this period. And by 2030, I can say that electrification strategy need to be revisited. And as for Mr. Aoyama, he has resigned from his position. I really feel that we like to extend our apology for troubling people such as customers, suppliers, shareholders, and our colleagues, all the stakeholders. And then Mr. Kaihara is going to cover as the executive vice president, and Mr. Inoue is going to be the head of the automobile business division and he is going to look into the operations of that area, and each business domain is actually supported by the leading persons, and I'm very sure that those human allocation will be good enough to keep going in a good way. Thank you very much.

Thank you, Mr. Yokoyama.

Are there any other questions?

From TV Tokyo, Ui, please. Can you hear me? Yes.

My name is Minamisawa. I'm substituting for Mr. Ui. A question to Mr. Mibe, the President. Yesterday, the U.S.-China have decided to reduce significantly the U.S.-Japan negotiations. What are your expectations, if any, towards those negotiations? Well, about U.S.-Japan negotiations, I mean, it's still ongoing. On our part, we want to see that there is global free trade because this will be the best for our business. We are not exporting from Japan to U.S. in such a large volume, so there is little impact there. But USMCA – well, we have the policy of – to produce where the demand exists. And therefore, based on this policy, we have been doing global business in Mexico, Canada, and United States. That is the USMCA. Based on this agreement, we are looking at this North America as one single market and build a supply chain in North America, including these three countries. and about the U.S. and Japan to have negotiated. It's not just limited to the United States. USMCA is the basis of our business, and therefore we want the USMCA to be in place so that we can do business in a free environment, not just Mexico and Canada, but also for the American auto industry. I think this is the best answer, best solution. So for us, we want to see that the free trade environment can be rebuilt, and we want to approach the government and others so that this will be realized. In the past, we've been doing this, but we will continue to work to try to make this happen.

That is all. Thank you very much, Mr. Minamisawa. And it's time for us to end.

With this, we'd like to conclude the financial results press conference. As for the materials that have been presented, please refer to them on our website. Once again, thank you for your participation.