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KAWASAKI: A YEAR TO FORGET

The powersports and engine division of Kawasaki Heavy Industries struggled to escape troubles evident at the end of Q3, to conclude its 2023/2024 fiscal year on 31 March with an overall poor performance. BDN financial editor Roger Willis reports.

Turnover posted only a marginal 0.2% increase to £3.019bn. This was blamed on falling sales of motorcycles destined for emerging countries and general-purpose petrol engines, despite increased sales of motorcycles in Europe and four-wheeled vehicles for the US.

Operating profit copped a 32.8% decline to £245.1m. Operating margin fell from 12.1% to 8.1%. Profitability was impacted by stagnant revenue, plus higher sales promotion expenses and fixed costs. Fines imposed by the US Consumer Product Safety Commission, in relation to a recall of certain off-road vehicle models, didn’t help.

Revenue from motorcycles supplied to the developed world improved by 3.2% to £1.109bn. However, total related wholesale volume was 11% down to 211,000 units. Within that, Japanese domestic sales were 14.8% up to 31,000, North America sank by 27.7% to 94,000 and Europe increased by 13.4% to 76,000.

Emerging markets motorcycle revenue was 10.7% down to £526.4m and volume plummeted by 26.7% to 233,000. Worst hit was the Philippines, suffering a 31.6% decline to 143,000. Indonesia dropped by 9.3% to 39,000. Latin America rose by 9.1% to 12,000. Various other markets combined fell by 28.3% to 38,000. Previously strong markets in China and Thailand didn’t warrant numerical inclusion.

Turnover from utility and off-road recreational vehicles, ATVs and personal watercraft — mostly aimed at the US market, was 12.6% up to £919.2m. Wholesale volume increased slightly by 1.1% to 88,000.

Irrespective of these setbacks, Kawasaki is thoroughly upbeat about the new 2024/2025 fiscal year. It points to substantial growth in the US and European motorcycle markets as well as continuing advances in the US utility and off-road recreational vehicle markets. Investments to expand existing US vehicle plant production capacity, and commence operations at a new plant in Mexico, are also under way. Launches of more battery-electric and hydrogen-electric vehicles are imminent too. Financially, Kawasaki forecasts revenue in the new year rising by 21.5% to £3.66bn and operating profit recovering by about 40% to £346m.

Yen-Sterling currency translation at forex rates applicable on 14 May

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