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HONDA REPUTATION REINFORCED

In what had to be its toughest year on record, Honda’s motorcycle business amply demonstrated what unassailable world leadership is all about. BDN financial editor Roger Willis reports.

Progressively fending off Covid-related attrition throughout this 12-month period, total revenue from bikes fell by just 13.2% to £11.59bn. Associated operating profit was 21.4% lower at £1.457bn. But a still-muscular operating margin of 12.6% was achieved, down from 13.9% in the previous fiscal year.

To get these figures into perspective, Honda’s pace of recovery was such that, during its fourth January-March quarter, revenue was actually 11.7% up year-on-year to £3.431bn and quarterly operating profit grew by 14.7% to £468m. Furthermore, annual operating profit made on bikes dwarfed a meagre profit contribution of £585m from the company’s much larger car operations — which turned over the immense sum of £56.934bn.

Across the fiscal year, global sales volume had shrunk by 21.8% to 15.132 million motorcycles and scooters. Asia was 22.8% down to 13.319 million. But among individual Asian countries, there were a couple of winners. China, an early escapee from Covid’s initial rampage, put on 13.9% to 1.15 million. And Pakistan rose by 0.6% to 1.066 million.

However, India was 17.8% down to 3.866 million, Indonesia fell by 44.6% to 2.685 million, Vietnam lost 18.1% to 2.104 million and Thailand dropped by 17.6% to 1.106 million. Elsewhere in emerging markets, Latin American volume supplied from Honda’s big Brazilian manufacturing hub in Manaus sank by 23.5% to 679,000.

In the developed world, Honda’s major markets were remarkably resilient. On home turf in Japan, sales improved by 4.9% to 215,000 machines. North America was 0.6% up to 332,000. Only Europe was slightly negative, falling by 2.1% to 234,000.

Honda says it expects demand to grow worldwide in the new fiscal year, and has forecast sales volume recovering to at least 18 million bikes. But the company also voiced concerns about a possible Covid resurgence and the global shortage of semiconductor microchips for automotive applications.

[Currency translation at forex rates applicable on 14 May]    

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