Honda’s 20 million bike prediction

The triumvirate of Japanese motorcycle producers still cheerfully counting their billions of yen across traditional fiscal years from April to the following March don’t always hit the jackpot, but they never stop trying. Excellent service to shareholders was delivered by two out of three in the past 12 months to 31 March 2024. And interestingly, all those macroeconomic woes that get western bike manufacturers crying into their beer weren’t regarded as worthy of a mention in any corporate reporting statements from Japan

Full-year results from the world’s biggest and most successful motorcycle manufacturer are never perfect. But Honda always gets much closer to perfection than any-body else. Its latest performance was another splendid example.

Annual motorcycle business revenue climbed by 10.7% to £16.511bn. Operating profit was 13.8% up to £2.852bn. Operating margin increased from 16.8% to 17.3%. Honda’s bike earnings almost exceeded its automobile business operating profit, which came in at £2.875bn on a hugely larger turnover figure.

Perhaps surprisingly, global motorcycle sales volume had grown by only 0.3% to 18.819 million units. But that concealed quality outpacing quantity. Asian head-count had actually deteriorated by 0.6% to 16.016 million.

Economic downturns in Vietnam and Thailand reduced respective sales in those markets by 14.8% to 2.05 million and 1.4% to 1.435 million. Other more minor losers included China. And Indonesia, where the Astra Honda joint venture shares its bounty with British conglomerate Jardine Matheson and is therefore less profitable, only managed a 6.5% gain to 4.77 million.

However, Honda’s wholly-owned enterprises in emerging markets responded. HMSI sales in India put on 12.5% to 4.53 million. And output at the brand’s Brazilian manufacturing hub in Manaus, serving Latin America, grew by 9.9% to 1.236 million. Overlapping some of these numbers, unspecified other regions saw their sales rise by 1.7% to 1.624 million.

The picture in developed markets with much higher profit margins was more attractive. North American sales rose by 8.5% to 498,000. European countries did even better, 26.8% up to 440,000. Only Japan’s domestic sales dipped marginally, 2% down to 241,000.

The forecast for Honda’s new fiscal year predicts global motorcycle sales volume will expand back in the direction of a 20-million-unit mark, with 5.2% growth to 19.8 million.

Asia should recover by 5.6% to 16.905 million. Other emerging regions are expected to put on 7.1% to 1.74 million. The European target is 8% up to 475,000, while Japan will disgrace itself with a 17% decline to 200,000. North America is scheduled to be a loser too, falling by 3.6% to 480,000.
-£ currency translation at forex rates applicable on 10 May

KAWASAKI: A YEAR TO FORGET
The powersports and engine division of Kawasaki Heavy Industries struggled to escape troubles evident at the end of Q3, to conclude its fiscal year with an overall poor performance.

Turnover posted only a marginal 0.2% increase to £3.019bn. This was blamed on falling sales of motorcycles destined for emerging countries and general-purpose petrol engines, despite increased sales of motorcycles in Europe and four-wheeled vehicles for the US.

Operating profit copped a 32.8% decline to £245.1m. Operating margin fell from 12.1% to 8.1%. Profitability was impacted by stagnant revenue, plus higher sales promotion expenses and fixed costs. Fines imposed by the US Consumer Product Safety Commission, in relation to a recall of certain off-road vehicle models, didn’t help.

Revenue from motorcycles supplied to the developed world improved by 3.2% to £1.109bn. However, total related wholesale volume was 11% down to 211,000 units. Within that, Japanese domestic sales were 14.8% up to 31,000, North America sank by 27.7% to 94,000, and Europe increased by 13.4% to 76,000.

Emerging markets motorcycle revenue was 10.7% down to £526.4m and volume plummeted by 26.7% to 233,000. Worst hit was the Philippines, suffering a 31.6% decline to 143,000. Indonesia dropped by 9.3% to 39,000. Latin America rose by 9.1% to 12,000. Various other markets combined fell by 28.3% to 38,000. Previously strong markets in China and Thailand didn’t warrant numerical inclusion.

Turnover from utility and off-road recreational vehicles, ATVs, and personal water-craft, which were mostly aimed at the US market, was 12.6%, up to £919.2m. Wholesale volume increased slightly by 1.1% to 88,000.

Irrespective of these setbacks, Kawasaki is thoroughly upbeat about the new 2024/2025 fiscal year. It points to substantial growth in the US and European motorcycle markets as well as continuing advances in the US utility and off-road recreational vehicle markets. Investments to expand existing US vehicle plant production capacity and commence operations at a new plant in Mexico are also under-way. Launches of more battery-electric and hydrogen-electric vehicles are imminent too. Financially, Kawasaki forecasts revenue in the new year rising by 21.5% to £3.66bn and operating profit recovering by about 40% to £346m.
-£ currency translation at forex rates applicable on 14 May

SUZUKI: STILL REFRESHED
The second year of Suzuki Motor Corporation’s motorcycle business reorganisation has delivered modest dividends again. Turnover rose by 10.1% to £1.879bn. Operating profit was 33% up to £119.7m. Operating margin reached 10.6%, improving from 8.8%. As usual, the biggest revenue source was Asia, rising by 11.7% to £949.9m. Within that, India grew by a ballistic 36.8% to £621.1m and was credited with much of the operating profit boost. Europe’s contribution improved by 19.6% to £240.2m. North America was just 2.3% higher at £251.4m.

Suzuki’s motorcycle production was static on 1.914 million units. Only 101,000 of these were made in Japan. Global unit sales rose by 2.4% to 1.912 million. Indian consumption climbed by 20.4% to 891,000. Asia, excluding India, fell by 11.9% to 702,000. Within that, China was 8.4% down to 394,000 and the Philippines dropped by 16% to 164,000. Elsewhere in emerging markets, Latin America was 3.8% down to 191,000.

In the more profitable developed world, European sales increased by 27.4% to 39,000. But North America declined by 5.3% to 30,000 and Japanese domestic numbers fell by 15% to 39,000.

Forecasts for its new 2024/2025 fiscal year show Suzuki is anticipating production to be 1.2% lower at 1.89 million units and sales 1.1% down to 1.892 million. The good news will be a 2.4% sales rise for Europe to 40,000 and North America improving by 10.6% to 33,000. However, Asian sales are likely to fall by 1.2% to 1.574 million.
-£ currency translation at forex rates applicable on 13 May