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THE MIGHTY HONDA FALLS TOO

With the first quarter of a new fiscal year spanning peak Covid-19 in many key markets from April through to June, the world’s biggest motorcycle manufacturer took the world’s biggest hit compared to its peers — and still trousered some earnings. BDN financial editor Roger Willis reports.

Honda’s normally monumental Q1 bike division revenue almost halved, plummeting by 45.2% to £1.972bn. However, amazingly, it achieved a divisional operating profit, albeit diving by 84% to just £80.5m. Operating margin sank to 4.1% from 13.1% in Q1 last year. In stark contrast, although Honda car operations suffered roughly similar turnover shrinkage of 53.7%, that resulted in a huge operating loss of £1.407bn.

Global motorcycle sales volume was slashed by 62.3% to 1.855 million. Asian countries were mainly responsible for this scale of retreat, owing to suspended production and distribution. As a whole, Asia was 64.1% down to 1.572 million. 

Among larger Asian markets, sales in India collapsed by 80.9% to 256,000 and Indonesia endured a 78.8% plunge to 244,000. But Vietnam, having begun to revive economic activity during the quarter, was only 36.6% down on 415,000. China, fully back in business by April, boasted a quarterly 35.1% increase to 291,000.

Developed regions fared better. North America and Europe respectively declined by 17.6% and 27.4%, both shifting 61,000 bikes. Honda’s Japanese domestic market got away with a marginal 2% drop to 50,000.

Honda is virtually unique in chancing a full-year forecast for its bike volume. This predicts an annualised reduction of 23.5% to 14.8 million machines sold.   

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