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HONDA DODGES THE DISEASE

Although Honda Group as a whole was pushed into a fourth-quarter operating loss by the Covid-19 pandemic affecting its automotive activities, motorcycle operations remained relatively unscathed from that direction during the company’s full fiscal year to 31 March 2020. BDN financial editor Roger Willis reports.

Annual revenue from motorcycles fell by 1.9% to £15.54bn. Associated operating profit was 2% down to £2.15bn. But operating margin was unchanged year-on-year at 13.9%. An economic downturn and rising unemployment in India, now relegated to Honda’s second-largest powered two-wheeler market, was mainly to blame for these slight declines.

Global Honda-branded wholesale bike volume dropped by 4.4% to 19.34 million, sliding back under a record 20-million marker exceeded in the previous fiscal year. The number of machines sold into Asian distribution channels sank by 5.3% to 17.262 million. Joint-venture affiliates manufactured 6.914 million units within that tally. The rest came from wholly-owned subsidiaries. 

Indian volume accounted for 4.705 million, a 14.8% retreat. Indonesia suffered only a 2.3% loss to 4.85 million. Thailand was 7.4% down to 1.342 million and Pakistan went backwards by 6.6% to 1.06 million. However, Vietnam more or less held station on 2.57 million, a marginal 0.1% rise, and the Philippines put on 1.1% to 628,000. Chinese quantities were unspecified. Elsewhere in emerging regions, Brazil stood out, boasting a 9% increase to 887,000.

Deliveries of higher-priced bikes to dealers in the developed world were mixed. European volume was 4% down on 239,000 and the domestic Japanese market fell by 1.% to 205,000. But North America was 9.6% up to 330,000.

In sharp contrast, Honda’s car business took a spanking. Global automotive sales shrank by 10% to 4.79 million vehicles. Revenue was 9.7% down to £76.85bn. Operating profit plunged by 26.9% to a comparatively pathetic £1.16bn — 46.3% lower than the aforementioned earnings before interest and tax from motorcycles. That included a coronavirus-related Q4 loss on cars of £570m, which imposed the aforementioned £42m final-quarter red ink at Group level.

It’s a good job Honda is still keen on making lots of motorbikes, eh?  

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