Unknown Executive

We now like to resume. Mr. Mibe-san, please.

Toshihiro Mibe
President, CEO, Representative Executive Officer & Chairman

And now in light of the financial results I explained, I would like to introduce the future direction of Honda's automobile business. With the aim of carbon neutrality by 2050, Honda has been taking initiatives towards the popularization phase of EVs. Yet we decided to discontinue launch of 3 EV models in North America as we have already announced. This, however, by no means is an indication that Honda is withdrawing from the EV business. We'll continue EV sales in regions such as Japan and Asia to meet local customer needs in line with EV adoption speed. In North America as well, we will carefully monitor market conditions, customer demand and lay the groundwork to deliver compelling products when the timing is right.

And that said, the fundamental issue facing our automobile business is not simply the slowdown in the EV market. In the past, Honda's Automobile business underwent deep structural transformations to the point where gasoline ICE and hybrid models alone generated close to JPY 1 trillion operating profit, excluding EV-related losses. However, in North America, Honda's principal market currently, our profit is down due to failure to fully absorb cost burden. And in China and ASEAN countries where competition is increasingly intense with emerging OEMs, our loss of competitiveness in sales prices and speed of offering new value to market is pushing down unit sales.