03/09/2026

BIZ & FINANCE THURSDAY | SEPT 3, 2026

17

Honda tells suppliers to cut costs in US$9b push to fend off China

Singapore economists see 2026 growth at 5%: Survey SINGAPORE: Economists polled by Singapore’s central bank have upgraded their growth outlook for the country for 2026 while making slight cuts to their inflation forecasts, a survey showed yesterday. Around half of the respondents in the Monetary Authority of Singapore’s September quarter survey cited a prolonged or escalating conflict in the Middle East as one of the major downside risks for the city-state, while 29.4% of the economists flagged the potential bursting of the AI bubble. The survey was sent out in August with 25 economists and analysts responding. The median forecast for growth this year increased to 5%, up from 3.5% in the previous survey in June, with growth in 2027 projected at 3.1%, up from 2.5%. Singapore’s economy grew 5.9% in the second quarter, beating expectations. In August, the trade ministry raised its growth forecast to 4.5% to 5.5% for 2026, from 2% to 4%. Respondents forecast core inflation for 2026 at 1.9% and headline inflation at 2.1%, lower than the respective 2% and 2.3% projected in the previous survey. Inflation rose 2% in July from a year earlier, and the central bank warned that it would stay elevated through the first half of next year. The central bank unexpectedly tightened monetary policy in late July, citing persistent inflationary risks from the Middle East conflict, which has driven up energy costs. – Reuters Ship traffic via Hormuz stays below average SINGAPORE: Four commodity vessels transited the Strait of Hormuz on Tuesday, down from 10 a day earlier and below the 10-day average of around 13, preliminary shipping data showed yesterday. The four vessels that transited were one very large crude carrier, one Panamax tanker, one Kamsarmax carrier and one intermediate tanker, initial data from shiptracker Kpler showed at 0200 GMT. Of the four vessels, one was entering the strait and three were leaving. The figures could change as some ships typically switch off transponders during the voyage. The US said it had launched a series of air strikes against Iran on Tuesday, prompting Iranian retaliation, in the most serious escalation of the conflict between the two countries in weeks. The Islamic Revolutionary Guard Corps said in a statement the US attacks would “tighten the lock” on the Strait of Hormuz, a critical waterway that carried about one-fifth of global oil consumption before the conflict. – Reuters

interests to work with our Pacific partners to combat organised crime,“ Prime Minister Anthony Albanese said in a statement. This year’s forum has been dominated by a spat over Taiwan’s participation. China, which views Taiwan as its own territory, has objected to the democratically run island’s presence at the annual meeting of the 18-member forum. Australia and New Zealand said on Tuesday the bloc would decide the guest list. Palau is among three Pacific nations that have maintained diplomatic ties with Taiwan. The meeting, which began on Aug 30, will run to Sept 4. – Reuters according to the documents. Such a reduction would allow Japanese suppliers to better compete with Chinese rivals, the documents said. Honda’s direct suppliers, or “tier one” suppliers, were also asked to review how they procured materials and were urged to make use of standardised parts sourced from second- and third-tier suppliers, to help keep costs down, the documents showed. Honda managers also asked suppliers to expand their own use of Chinese-made components where possible, according to the documents. The cost-reduction targets were “extremely large” and it was not immediately clear whether they would be achievable, one of the sources said. The other person said that up until the spring meeting, Honda had not given the impression that it needed aggressive cost cuts. Now, the situation appeared to leave “no room for delay,” the person added. Honda shares were down 2.5% in afternoon trading yesterday. Those in several Honda-affiliated suppliers also traded lower, with seat maker TS Tech down 1.3%, frame maker H-One off 2.3%, and auto body parts maker G-Tekt 2% lower. On Monday, Honda and Nissan said they would jointly develop standardised electronic control units for SDVs and aim to roll out an architecture built around them from the 2029 financial year. Honda CEO Toshihiro Mibe won support for his reappointment to the company’s board in June. He has faced pressure from former executives to step down over the company’s performance. Last year, Honda and Nissan ended merger talks that would have created one of the world’s largest automakers. In addition to Chinese competition, Honda and other automakers are being squeezed by US President Donald Trump’s import tariffs and higher labour expenses. They also face the growing need to invest in research and development of technology as cars become more advanced, raising costs across the industry. – Reuters

targets or details of discussions with suppliers. The automaker was working with suppliers globally to improve competitiveness and reduce costs, including through the use of standardised parts, the spokesman said. In spring of this year, Honda managers met with major suppliers at a convention centre in Utsunomiya, a city north of Tokyo near the automaker’s R&D facility, according to the documents and the people. It was not clear how many suppliers attended. Honda managers briefed suppliers on the plan and said it would also look to source more components from Chinese suppliers, one of the people said. Each supplier was later presented with company specific targets to cut costs, the people said. Honda is aiming to reduce costs by 30% in three key parts categories: pressed and forged components, electrical parts and parts related to software-defined vehicles (SDVs),

software and battery technology — and prices that are by far the industry’s lowest. Honda, the world’s largest motorcycle manufacturer, is trying to fix its struggling car business. It expects EV-related losses to ultimately total more than US$12 billion (RM48 billion), one of the biggest hits among global automakers, and is now shifting its focus to gasoline-electric hybrids. In May it reported its first-ever annual loss as a publicly traded company. The maker of the CR-V sport utility vehicle now aims to save ¥1.5 trillion (RM38 billion) by 2030, according to the documents and the person. This story is based on a Reuters review of internal company documents and interviews with two people familiar with the matter, both of whom declined to be identified because the information is not public. In a written response to questions, a Honda spokesman declined to comment on specific cost-reduction

TOKYO: Japan’s Honda aims to cut more than US$9 billion (RM36 billion) in costs over the next four years and has instructed suppliers to drastically reduce their prices, according to internal documents and one person familiar with the matter. The plan, reported here for the first time, is one of the most striking examples yet of how Japanese automakers are scrambling to deal with intensifying competition from China. BYD and other Chinese electric vehicle (EV) makers are capturing sizeable market share in Southeast Asia, Latin America and Europe, powered by advanced o Japanese automaker steps up efforts to compete with fast-growing Chinese rivals

Honda is under pressure to improve performance as the global car industry becomes more competitive. – UNSPLASH PIX

Australia, US offer $580m aid to Pacific Islands SYDNEY: Australia and the US yesterday announced a combined US$580 million (RM2.34 billion) in funding for the Pacific Islands as they battle China for influence in the region. The US contribution, while smaller at US$150 million, is one of the most public signals from the Trump These include the donation of a presidential building complex in Vanuatu, a comprehensive strategic partnership with the Solomon Islands including a deal on policing cooperation as well as a comprehensive strategic partnership with the Cook Islands. The region has been badly hurt by the Iran war exacerbating energy security concerns, said Oliver Nobetau, the Lowy Institute’s Pacific Islands Program director.

The fallout has resulted in “slowing economies, prioritisation of essential services, all against the backdrop of a super El Nino — which require support from external partners to curb,“ he added. Australia said it will offer A$600 million (RM1.7 billion) to combat drug smuggling in the region including funds for enhanced aerial surveillance and more training for police and border officials. “The Pacific is our home and our family. That’s why it’s in Australia’s

“Chinese measures in the region are a forcing function for the US to understand to be more deliberate in their engagement,“ said Jared Mondschein, director of research at the US Studies Centre. The US funding includes US$60 million to help countries address the global energy crisis by expanding fuel storage capacity and supporting grid stability.

administration that it is still engaged in the Pacific after it dismantled the US Agency for International Development last year. The funding, announced by Deputy Secretary of State Christopher Landau at this year’s meeting of the Pacific Islands Forum in Palau, follows an increase in China’s influence in recent years via grants, infrastructure projects and donations.