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HONDA GATHERS SPEED

With three quarters of its 2020/2021 fiscal year now done and dusted, Honda’s motorcycle business continues to race ahead of competitors in recovery from the Covid pandemic. BDN financial editor Roger Willis reports.

Nine-monthly revenue to 31 December was 20.7% down at £8.73bn, compared to a 27.3% reversal at the halfway point. Associated operating profit has fallen by 31.4% to £1.057bn, against a 46.1% shortfall three months earlier. Operating margin has revived to 12.1%, contrasting with 14% in the equivalent period of the previous fiscal year.

Once again, it’s a case of two wheels good, four wheels bad. Although Honda’s much bigger car operations have moved back into the black after posting a six-month operating loss of more than half a billion quid at the end of Q2, this still only amounted to a feeble three-quarterly operating profit plunging by 77% to just £365m — on a stupendous turnover of £44.118bn. Needless to say operating margin was pathetic at 0.8%.

Furthermore, bikes were improving rapidly in the third quarter. July-September turnover was only 7.4% down at £3.405bn. And operating profit was a mere 2.4% lower than Q3 2019 at £504m.  

Total global motorcycle wholesale volume over nine months stood at 10.591 million, 29.6% in arrears. Asia was responsible for most of that decline, sinking by 31.2% to 9.257 million. 

Among the largest Asian markets, India fell by 29.9% to 2.643 million, Indonesia by 53.9% to 1.677 million and Vietnam by 22.5% to 1.603 million. Conversely, Chinese sales were 9.1% up at 949,000.

In the developed world, North America led the way with an 8.6% rise to 240,000. Japan added 0.6% to 155,000. However, Europe dropped by 14.5% to 159,000.

For its full fiscal year to 31 March 2021, Honda is now predicting worldwide sales volume will be reduced by 22.4% to 15 million. Asia will account for 13.195 million. European countries should be responsible for 230,000 and North America for 320,000.  

[Yen-sterling currency translation at forex rates applicable on 9 February]

 

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