Honda Heads Into Results With Japan Sales Signalling a Softer Quarter

HMC reports second-quarter earnings on November 6 with its own registration data pointing to weakness in its most important home market.

Japan car sales tracked by the Japan Automobile Dealers Association (自販連) have been measured to lead Honda's quarterly revenue by 65 days, a strong fit across 14 quarters with a hit rate of 83%. With all three months of the July-to-September quarter now in, Honda's domestic new car sales totalled 150,901 vehicles, running 10.5% below the same quarter a year earlier. That is the full quarter's picture, not a partial read, and it arrives three days before the print. The dataset has no bearing on regions outside Japan, but home-market volume is a material input to Honda's consolidated revenue.

The lending market and short positioning tell a different story from the registration data: bears have retreated. Borrow availability has loosened sharply in recent weeks, reaching 348% (meaning roughly 3.5 shares are available to borrow for every one already lent out), up from a 52-week trough of 47% in late September when borrow was genuinely scarce. Cost to borrow has dropped to 1.2%, down more than 20% over the past week and far below the spike above 30% seen briefly at the start of October. Short interest has climbed about 4% over the past week to roughly 3.5 million shares, but that remains a modest absolute level against Honda's market capitalisation of $44 billion. The ORTEX short score has eased to 42 from 48 ten days ago, consistent with shorts reducing conviction rather than pressing new positions.

Options positioning reinforces the cautiously constructive tone. The put/call ratio at 0.37 sits well below its 20-day average of 0.48 and close to its 52-week low of 0.35, meaning call volume is running unusually heavy relative to puts. That places options buyers on the bullish side of the distribution heading into Thursday, though the stock is essentially flat on the week at $34.29, following a strong 9.4% one-month gain.

Analyst data is too stale to carry with confidence. The most recent analyst action on record is a Macquarie downgrade to Neutral in June 2025, and prior price targets in the database predate any useful comparison to current levels. What is current is the institutional picture: BlackRock added 6.1 million shares in the quarter to September, lifting its stake to 8.8% of shares, while Norges Bank trimmed by 4.6 million shares. The ownership base remains dominated by Japanese asset managers and global index funds, none of whom are signalling a tactical shift. A recent note on Honda's own Q2 operating profit shows 716 billion yen, down 23% year over year, with the company already cutting its full-year guidance, which frames the print more as a question of how deep the damage goes than whether it exists.

Thursday's result will test whether the 10.5% drop in Japan domestic sales during the quarter has been absorbed by stronger volumes elsewhere, and whether management's revised guidance still holds credible ground after a sharp profit decline.