The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

By Katrina Hamlin

HONG KONG, June 12 (Reuters Breakingviews) - A failed coup at Honda Motor 7267.T paints a target on CEO Toshihiro Mibe's back. While he survived the attempted overthrow by former executives, as Reuters reported on Tuesday, a series of missteps leave the car- and motorbike-maker he has run since 2021 worth just $35 billion. That implies shareholders are effectively ascribing a negative valuation to both its car and finance units. An activist investor could help get it firing on all cylinders, preferably under new management.

The cabal started plotting to oust the boss late last year. Among their number was 1990s boss Nobuhiko Kawamoto, and they occasionally met with current executives, per Reuters. It culminated in Kawamoto asking Mibe to resign in April – and being ignored.

The CEO, who has also been chair since 2024, was late to rethink electric-vehicle projects as demand stuttered in the U.S., its largest market, and slow to adapt to rising local rivals in China. Last month, Honda reported its first annual loss in nearly 70 years as a listed company. Its shares have underperformed Toyota Motor and the benchmark Topix .TOPX during Mibe's tenure.

Honda’s current $35 billion market capitalisation, excluding treasury shares, doesn’t even reflect the value of the motorbike unit. It’s likely to rake in $4.6 billion in operating profit this financial year, per Visible Alpha; put that on the average 12 times multiple of peers Harley-Davidson HOG.N and Yamaha Motor 7272.T, and it’s worth $50 billion. Pop the group’s financial services division on book value, and that’s another $20 billion.

That ought to have activist investors like Elliott Management or Effissimo Capital Management rushing to their dealers. A campaign could push for an exit in the small but money-losing power products business, among other things. Cut some more costs and add on some smart strategic partnerships, and the automaking business might be able to improve its forecast dismal 0.8% operating margin for the year to March 2028 to a lowly 2%. On peers’ average multiples, it could be worth more than $10 billion. Combined with motorbikes and financial services, the whole group could be worth $80 billion.

Granted, an overhaul under the current structure might take too long. Spinning off the motorcycle business would be a quick way to boost value. The old guard might not like that, either. But plenty of shareholders would.

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CONTEXT NEWS

A group of retired Honda Motor executives attempted to oust the company’s CEO, Toshihiro Mibe, according to a Reuters report published on June 9.

Beginning late last year, over months of messages, meetings, and meals that sometimes included current executives, they laid out a case against Mibe, ​according to a written summary of their discussions reviewed by Reuters and interviews with two participants. Nobuhiko Kawamoto, former chief executive between 1990 and 1998, was a participant in some of those conversations and then visited the company's Tokyo headquarters in April and told Mibe to resign, three people familiar with that meeting told Reuters.

Mibe did not step down. Honda said in a statement issued ​in response to Reuters questions that it had no knowledge of discussions by former executives.

Honda on May 14 posted an operating loss of 414 billion yen ($2.6 billion) for the 12 months to the end of March 2026, compared with a profit of 1.2 trillion yen a year earlier – its first annual loss in nearly 70 years as a listed company. Revenue grew 0.5% to 21.8 trillion yen.