To understand how much difficulty Honda is in today, you need to imagine the ecstasy of working as an engineer for the company in late 1964: the year of the Tokyo Olympics, of the first bullet train and of Japan’s global arrival as a speeding, soaring symbol of the future.

You spend your days in a unique new R&D centre built to enshrine the idea that the company is led by you, the free-spirited engineer. The prototype of your company’s first family car is secretly nearing completion. The Honda RA271 has just competed, for the first time, in a Formula 1 race at the Nürburgring. The Beach Boys are in the charts with a song — Little Honda — celebrating the supreme sexiness of your motorcycles.

Now picture a Honda engineer in early 2026, with car sales faltering in key markets and the company in visibly poor shape. Engineers were informed in March that they would be moving back into a reconstituted R&D centre, chaotically reversing the company’s decision to scrap it in 2020. China’s humanoid robots are dancing, somersaulting and running on the world stage but in 2018 Honda ditched the Asimo project that pioneered this exact technology. Honda’s much-anticipated return to Formula 1 for the current season has been, so far, humbling.

It has been a masterclass in how a succession of management mis-steps can sap the corporate mojo. But there is broader misery for Japan too. Honda, since the 1960s, has been a true beacon: leading (for most of the time) by brilliant, adventurist, passionate example. The dimming of that light leaves Japan with fewer bright spots than it might like.

The mood would likely darken even further if Honda is hustled, either by financial stress or shareholder activism, into a bad merger or a sad break-up — both now distinct possibilities. Defensive mergers, say analysts, may be the best option for even the best known of Japanese brands; activists have been emboldened to attack the strategies of bigger and bigger names.

Honda, like other carmakers, is in a rolling maelstrom of industrial disruption caused by wars, US tariffs and the shocking rise of cheap, cruelly competitive Chinese cars with development times about half of Japan’s. But Honda seems to be coping particularly badly.

Last month, Honda suddenly said it would scrap three electric vehicle models it was about to begin producing in North America and warned that it could incur as much as $15.7bn of losses in the process. The cars were supposed to spearhead Honda’s autonomous driving technology. A few weeks later, Honda and Sony abandoned their joint development of an electric car due to showcase the pair’s prowess in engineering, sensors and in-car entertainment. The company’s target of only selling EV and hydrogen-powered cars by 2040 appears doomed. The cost of this almighty U-turn puts Honda on track to record, at its full-year results next week, the company’s first annual net loss since going public in the 1950s. A test for Honda in coming months and years is whether it will be able to maintain its famously rock-solid dividend.

But somehow worse than this were the reported comments of Honda’s president, Toshihiro Mibe, who was recently visiting a formidably low-cost, fully automated car parts supplier factory in Shanghai and remarked “we have no chance against this”. There were qualifiers, of course, and Mibe is using the threat to urge greater speed of digitisation and to justify a bet that reconvening the disbanded R&D unit will help. Still, it is hard not to hear defeatism in those words, and they are all the more remarkable coming from a company that has been a projector of triumphalism.

The core problem at Honda, says CLSA autos analyst Christopher Richter, is that while its car division has lurched from setback to setback, its highly profitable motorbike division continues to be the global gold standard. Its strength, he says, has allowed a succession of Honda CEOs to use the bikes as a crutch as the cars and other divisions (Honda jets, anyone?) have struggled. “It has allowed complacency, it has allowed them to be too cavalier,” says Richter.

The combination of all this — a weakened, demoralised company with a mismatch of good and bad divisions — say Richter and others, makes Honda ripe for activist intervention. The other great feature of Honda — often turned into a virtue — is that it is stubborn. It may come under pressure to radically re-engineer itself and pursue options that could revitalise a national hero. There is no guarantee it will seize them.

leo.lewis@ft.com