Impacted by falling sales in Asia, Honda’s motorcycle operations were hit by a decline in revenue and earnings during the nine months of its current fiscal year to December 2019. BDN financial editor Roger Willis reports.
Turnover from bikes during this period was 1.6% down to £11.168bn. Associated operating profit dropped by 10% to £1.565bn and operating margin fell from 15.3% to 14%. However, these figures continued to support a “two wheels good, four wheels bad” thesis. Operating profit in the Honda car business also sank, by 12.8% to £1.614bn — not significantly higher than the return on motorcycles, despite a vastly greater related revenue of £55.35bn. Operating margin on cars slid from a febrile 3.1% to an even weaker 2.9%.
Global motorcycle sales volume shrank by 4.1% to 15.038 million. Asia was 5.2% down to 13.453 million. Key markets in South-East and Southern Asia fell by 7% to 11.78 million. India was worst afflicted with a 16% retreat to 3.771 million, attributed to economic stagnation and rising unemployment. Indonesia, Thailand, Vietnam and Pakistan all lost ground too, The only brighter note came from the Philippines, where sales rose by 5.7% to 480,000.
Better news could be found elsewhere. Europe improved by 2.8% to 186,000 and North America added 2.3% to 221,000. Other regions, led by Latin America, stacked on 9.1% to 1.024 million. Brazil was a particular star of that show, rising by 12.9% to 664,000. The Japanese domestic market was 1.9% down to 154,000.
Honda has maintained a 12-monthly sales forecast to the end of March 2020 at 19.9 million motorcycles, 1.7% lower than the record 20.238 million actually sold in its previous fiscal year. However, an annualised European sales prediction has been revised upwards by 2% to 250,000.