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FAST LANE RECOVERY FOR HONDA

Although it has taken a hammering, Honda’s motorcycle business is roaring ahead of rivals in the fight against pandemic effects, as half-year results to the end of September amply demonstrate. BDN financial editor Roger Willis reports.

In the first six months of the current fiscal year, total revenue fell by 27.3% to £5.645bn. But turnover had recovered by 80% from Q1 to Q2. Similarly, a half-yearly operating profit of £586m was 46.1% down. However, the Q2 contribution was six times higher than Q1’s meagre earnings. In sharp contrast, while the much bigger Honda car business is also recovering and returned to profitability during Q2, it still posted a £519m first-half operating loss.

At the halfway point, global wholesale bike volume (including Honda-branded machines made by joint-venture affiliates) had sunk by 36.9% to 6.322 million. In stronger and more lucrative developed markets, Japanese domestic sales suffered the least, just 2.7% down at 109,000. North America fell by 5.4% to 141,000 and Europe lost 12.1% on 124,000.

Asia bore the brunt, plunging by 38.5% to 5.502 million. Among larger Asian nations, India was 44.2% in arrears at 1.495 million. Indonesia, cursed by tightened consumer-credit criteria on top of the Covid-19 impact, dived by 55.2% to 1.093 million. Thailand dropped by 35.1% to 434,000.

Doing somewhat better, Vietnam was 24% down at 997,000. Pakistan and the Philippines respectively fell by 25.3% to 393,000 and 27.1% to 217,000. Icing on the cake came from China, which had already begun to rebound during Q1, in the shape of 18.1% growth to 608,000.

Honda expects to accelerate recovery during the second half of its fiscal year to the end of March 2021. The company has stuck with a wholesale forecast of 14.8 million bikes for the full 12 months, a 23.5% shortfall on the previous year’s tally of 19.34 million.

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