honda corporate update - 2017 spring · motorcycle business operations business strategy honda...
TRANSCRIPT
Honda Business Status
Financial Highlights
Automobile Business Operations
Motorcycle Business Operations
Business Strategy
Honda Corporate Update
2030 Vision
2
70
80
90
100
110
120
130
183 203 199 178
177 192 182 171
461 280
153
501
7.9%
1.9%
4.2%
6.4%
2.9%
5.5%
6.6%
5.0%
3.4%
6.0%
5.0%
-1%
1%
3%
5%
7%
-200
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
FY2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018(P)
PP & Others Finance Motorcycle Automobile O/P Margin
・Earthquake・Thai flood・Earthquake・Thai flood
2012
231
569
363
189
953
USD/JPY
544
¥105 forFY18
840823
670
IFRSUS GAAP
Profit Structure Profile over Past Decade and FY18 Forecast
・AirbagInflator Issue
・AirbagInflator Issue
・LehmanCrisis
・LehmanCrisis
Yen (billion)
705
503
3
FY17Results
FY18Forecast Change FY17
ResultsFY18
Forecast Change FY17Results
FY18Forecast Change
Japan 156 170 + 14 603 615 + 12 301 265 - 36North
America 294 315 + 21 1,970 1,920 - 50 2,977 3,010 + 33Europe 217 220 + 3 184 175 - 9 1,035 1,030 - 5
Asia 9,513 10,465 + 952 684 730 + 46 1,430 1,460 + 30Other
Region 1,057 1,050 - 7 242 245 + 3 378 400 + 22Total 11,237 12,220 + 983 3,683 3,685 + 2 6,121 6,165 + 44
11,23712,220
3,683 3,685
+ 983( + 8.7 %)
+ 2( + 0.1 %)
+ 44( + 0.7 %)
6,121 6,165
Forecast: Consolidated Unit Sales
AutomobilesMotorcycles Power Products
Unit(Thousand)
FY18Forecast
FY17Results
FY18Forecast
FY17Results
FY18Forecast
FY17Results
4
FY18 Forecast: Change in Operating Profit
Operating profit - 135.7 ( - 16.1 % )
840.7
705.0+ 59.3
- 95.0- 54.0
+ 75.0 - 37.0
Excluding currency effects and impact of pension accounting treatment
Operating profit + 43.3 ( + 6.5 % )
- 84.0661.7
Operating margin6.0%
Operating margin4.9%
Operating margin5.0%
CurrencyEffects
Impact of pension
accounting treatment
Revenue,model mix,
etc.
Cost Reduction,etc.
Increase inSG&A Increase in
R&D
- JPY / USD - USD / Others
(BRL, CAD, MXN)- JPY / Asian Currencies
(INR, THB, VND, CNY, IND)- Others
- 38.0- 1.5
- 13.0
- 42.5
FY17Results
FY18Forecast
Yen (billion)
5
Alliance as an Open Innovation
Strategic alliance to optimize Honda’s strengths
Collaboration in the Area of Small-sized Scooters in the Japanese Market
Collaborate on Next-Generation Fuel Cell Technologies
Establish JV for the development, manufacture and sales of motors for electric vehicles
Collaboration in the area of motorcycle sharing services
Technical Collaboration of Fully Self-driving Automobile Technology
Joint Research Project for Artificial Intelligence
Strengths in technology and
manufacturing in a broad area
Customer/Market base with 28 million
customersaround the world
Ability tocreate
solutions
Strengthof Honda
Collaboration Toward the Establishment of Social Infrastructure
GM
Waymo
SoftBank
YAMAHA
Grab
HITACHI
Japan Post
6
Honda Business Status
Financial Highlights
Automobile Business Operations
Motorcycle Business Operations
Business Strategy
Honda Corporate Update
2030 Vision
7
2030 Vision Summary
Creating the Joys
Expanding the Joys
Ensuring the Joys for
the Next Generation
Toward a clean and safe/secure society
Accommodate the different characteristics of people and society
Provide the ideal products and services that fulfill societies’ expectations and meet individual needs
Lead efforts to realize a carbon-free society
Lead efforts to realize a collision-free mobile society
Creating value for “mobility” and “daily lives”
Provide people the joy and freedom of mobility
Provide people the joy of making their lives better
Growth through the pursuit of quality
Businessviewpoint to
focus onEffective utilization of corporate resources
8
Serve people worldwide with the “Joy of expanding their life’s potential”- Lead the advancement of mobility and
enable people everywhere in the world to improve their daily lives-
Business Viewpoint to Focus on
Effective Utilization of Corporate Resources
Advance the Six-region global operation structure(Increase efficiency of our operations from a global perspective)
Collaboration for open innovation with third parties (Focus on what we have to do + Open innovation)
Solidifying existing businesses
Advance the Six-region global operation structure(Increase efficiency of our operations from a global perspective)
Collaboration for open innovation with third parties (Focus on what we have to do + Open innovation)
Solidifying existing businesses
What we have to focus on in order to transform and
advance existing businesses and create new value
Strengthen business foundation for further growth
9
Honda Business Status
Financial Highlights
Automobile Business Operations
Motorcycle Business Operations
Business Strategy
Honda Corporate Update
2030 Vision
10
Honda FY2011 Rating ReviewAutomobile Business - Civic
Improve quality of business forsustainable & profitable growthImprove quality of business forsustainable & profitable growth
Develop Innovative ProductsUnique to Honda
Strengthen global and regional models
Flexible global production infrastructure
Strong attention to “product concept” and further evolution of design and driving experience
Electrification Technologies
Advance the Six-region Global Operation Structure
Core Strategies for Growth in Automobile Operations
11
16% 14%
Regional models
Global models
Global models
70%
Mini and compact models in Japan
Light Trucks in U.S.
Brio series in AsiaChina specific models
5.0CY2016
mil
: core models developed for worldwide distribution
Global Compact Series Civic
Avancier (China)
BR-V (Asia)
Ridgeline
CR-V Accord
: models developed and produced locally tomeet specific needs of that region or market
Acura Other
Strengthen Global and Regional models
12
Civic 5D HatchbackCivic 2D Coupe Civic 4D
Civic global launch schedule
5.0 milCY2016CR-V
Accord14%11%
Civic
14%
Civic, CR-V and Accord continue to be widely popular representing approx. 39% of CY2016 global Honda unit sales.
• CR-V and new Accord will utilize commonizedplatform and downsized turbo engine.
Global models : Civic, CR-V and Accord
• New Civic utilizes common platform for 4D, 2D and 5D hatchback.
• 5D hatchback is manufactured in the UK and is exported to North America and Japan.
Fit / City / Vezel31%
(Plan)
13
Global models: Direction of Model Development
2013 2014 2015 2016
Global Compact SeriesNew Accord
Civic
CR-V
Global Operation Reform• Concurrent development
in all six regions• Adoption of locally
optimized design
• Increase commonality of platform and parts (Civic, CR-V, Accord)
• Adopt Lead-Country Introduction Strategy(Clarification of model development leadership in each region and increase model development efficiency.)
• Introduce advanced platforms to accommodate electrification of powertrains
HR-V
Fit City
Further enhance electrification, autonomous driving and connectivity technologies.
Spearhead industry effort to realize a carbon-free and collision-free mobile society.
14
Ridgeline
2015
Pilot
(May 2015)HR-V
Regional models
Global models
Civic Sedan (November 2015)
New Accord
(June 2016)Ridgeline
Civic Coupe (March 2016)
Civic Hatchback (September 2016)
All Honda Light Trucks to undergo full-model change in short period
CR-V(December 2016)
Odyssey (Spring 2017)
2016 ~
Model Line-up in North America
(June 2015)
15
CR-V
RDX
■ Production Allocation
Indiana
OhioEast
LibertyPlant(ELP)
20172016
CR-V
MDX
Pilot
Shift
Civic
MDX
New
Japan CivicPlan to import
Alabama
Pilot
Japan
Civic
Ridgeline Odyssey
Odyssey
Ridgeline
Alabama
11Production Allocation in North America
ProductionPlant
■ As of the end of 2017
Indiana
CR-V
Civic
MexicoEl Salto
CR-V
HR-V
Shift
Ohio(East Liberty)
RDX
CR-V
MDX
Production in North America
16
By utilizing common platforms and strengthening local procurement and R&D functions, successive launch of cost competitive models being realized
SDN(4D/5D) SUV MPV
D
Guangqi
Dongfeng
C
Guangqi
Dongfeng
B
Guangqi
Dongfeng
Accord(2013 FMC)
Jade (2013)
Crider (2013)
Odyssey
Spirior(Dec 2014)
Gienia(Oct 2016)
Segment
(Aug 2014)
Fit (May 2014)
City (Aug 2015) Vezel 1.5L (Mar 2015)
XR-V 1.5L (Jul 2015)
Vezel 1.8L (Oct 2014)
XR-V 1.8L (Dec 2014)
New CR-V (2017)
Elysion(Jan 2016)
Greiz (Nov 2015)
UR-V(Mar 2017)
New Civic(April 2016)
Avancier(Oct 2016)
Regional Models in China
17
0%
5%
10%
15%
20%
0
20
40
60
80
100
120
CY12 13 14 15 16
Volume
Honda share
India
Thailand
Indonesia
201620152014201320122011
Brio Series
Global Compact Series
Fit / JazzCity HR-V
Brio Amaze Mobilio0%
5%
10%
15%
20%
0
50
100
150
200
250
CY12 13 14 15 16
VolumeHonda Share
0%
5%
10%
15%
20%
0
50
100
150
200
CY12 13 14 15 16
Volume
Honda Share
0%
5%
10%
15%
0
50
100
150
200
250
300
CY12 13 14 15 16
Volume
Honda Share
*First car incentive
MalaysiaBR-V
Regional Models in Asia
Unit(thousand)
India (Mar 17)
WR-V
18
1,066 1,066 1,066
1,923 1,923 1,923
200 200 200
960 1,080 930
840+501,080+50 1,080+50
150 151 151
Mar '15 Mar '16 Since Apr '17
Honda FY2011 Rating ReviewHonda FY2011 Rating ReviewAutomobile Business - Civic
5,189
as of
Japan
NorthAmerica
Europe
Asia
China
Other
5,550+361
China +240Guangqi +120 Dongfeng +120
Thailand +120Nigeria +1
FY2016
(Export only)
Global Production Capacity
(Export only)(Export only)
5,400-150
Thailand -150
FY2017
Unit(thousand)
19
China
Europe
Capacity increase to 5.7 milEstablish stable production structure leveraging regional capacity + mutual parts/model sharing
North America
South AmericaAsia
Japan
1.06 mil
<Export> Global Models
& Hybrid models 1.92 mil200,000
Primarily Civic 5D and CR-V production
150,000
1.13 mil
<Export> Acura & L/T models
Fit & CR-V
930,000
<Export> • Strengthen mutual parts/model
sharing within Asia• Export to Africa
<Export> Leverage local cost benefit for
next markets (Africa)
Middle East and Africa
JazzHybrid models
CR-V
Accord & L/T models
Acura
10-20%for Other regions
80-90% for Local markets
Total Capacity
approx. 5.4 mil units(Since April 2017)
City
Utilization ImageFit
Civic 5D from UK
1,000
CR-V , HR-V(plan)
Civic(option)
Flexible global production infrastructure
(Units)
Clarity Series(plan)
20
Capacity Utilization by Region
101%88% 81%
94%
FY14 FY15
96% 77% 70%96%
95% 95%50% 61%
100%
FY16FY14 FY15 FY16
FY14 FY15 FY16 FY14 FY15
111% 73%FY16
64%FY16
104%FY16FY14 FY15FY14 FY15
(Excluding export factory)
101%
North America Japan
China Asia
Europe South America
FY17 71% 76%
88%
118% 69%
84%
FY17
FY17 FY17
FY17 FY17
21
2010 2020 2030
DI engineCVT / DCT
Turbo engine
Enable people to experience the joy and freedom of mobility and contribute to the creation of a sustainable society where people can enjoy more harmonious lifestyles
Honda’s Environmental and Safety Vision
2000
(CO
2(g/
km)
0 (2002) (2008) (2016)
Global expansion
Global expansion
Technologies to increaseelectrical efficiency
Technologies to increasethermal efficiency
ZEROemissions technologyNew BEV
New FCV
(2020)
One-motorHybrid system
Two-motorHybrid system
Three-motorHybrid system
Looking towards zero emissions withthe development of ZEV and PHEV
CLARITY FUEL CELLFCX CLARITYFCX
ACCORD PHEV
Roadmap for Environmental Technologies
Clarity BEV (2017)
(2017)
Clarity PHEV
22
(2013)
2016 2020 20302015
CLARITYFUEL CELL
ACCORD PHEVACORD HEV
Roadmap for Environmental Technologies
Two-thirds of global sales will come from electrified vehicles by 2030
FitHR-VFreed
Grace(City)etc.
Clarity BEVClarity PHEV
20252017
NSX(Sports Hybrid)
2018
Optimizing the merit of alliance, expands to the mass-volume models to increase sales volume and
cope with ZEV/NEV requirement in the US and China.ZEV in the US will be enhanced in 2018
NEV in China starts in 2018
New FHEVin US & Europe
The Clarity series will contribute to an anticipated five-fold increase in Honda's U.S. sales of electrified vehicles over the next four years.
CDX HEV
US : Two-motor hybrid system to be applied to light truck lineup.More than half of all new models launching in next two years will be electrified vehicles.
Europe : Hybrid, plug-in hybrid, battery electric and fuel cell cars to make up two thirds of Honda’s European sales by 2025.
Establish JV for the development, manufacture and sales of motors for electric vehicles
HITACHI
Collaborate on Next-Generation Fuel Cell TechnologiesGM
New FCV
New BEVin China
23
CR-V HEV
MDX(Sports Hybrid)
Roadmap for Environmental Technologies
The Clarity Fuel Cell, only five passenger sedan in the industry, launched in Japan in March 2016 and in US in December 2016 respectively.
Clarity Plug-in Hybrid will be launched in the US in 2017 which will be anticipated to earn 42-mile EV driving range rating and 330-mile extended range rating
Three advanced electrified powertrains in a single vehicle platform to address cost and manufacturability and provide customers with more choices
“3-in-1” Clarity series provides unparalleled electric drive choice with premium midsize sedan capability and three advanced electrified powertrain options
24
Toward Zero Collisions
Aiming for practical application of autonomous driving on highways around 2020
Roadmap for Safety Technologies
25
10,430 11,588
12,777
14,491 15,600
16,522 17,479 17,550
0
5,000
10,000
15,000
20,000
CY09 10 11 12 13 14 15 16
Passenger CarsLight Trucks
1,151 1,259
1,147
1,423 1,525 1,541 1,587 1,638
0
500
1,000
1,500
2,000
CY09 10 11 12 13 14 15 16
Acura
Honda Passenger Cars
Honda Light Trucks
Source: Honda
Honda Unit Sales
Odyssey (Spring 2017)
Honda Topics Improve cost competitiveness of core models
- Increase commonality of platforms and parts- Leverage global suppliers
Increase production capacity of Light Trucks- Shift all production of MDX from Alabama to Ohio by fall, 2017
Introduce more electrified vehicles- Clarity Electric and Clarity Plug-in Hybrid will be launched in 2017
Accord (TBA)
Civic Si, Type R(Summer 2017)
Clarity Plug-in Hybrid (Within 2017)
Unit(thousands)
Source: Autodata
Industry Demand Unit(thousands)
Clarity Electric (Within 2017)
New Model Launches/ FMC
United States Automobile Operations
27
4,880 4,601 4,753
5,211 5,692
5,297 4,937 5,078
0
2,000
4,000
6,000
FY10 11 12 13 14 15 16 17
Registered vehiclesMini vehicles
662 608 601
717
848 788
704 711
0
200
400
600
800
1,000
FY10 11 12 13 14 15 16 17
Registered vehicles
Mini vehicles
Source: MUMSS
Industry DemandUnit
(thousands)
Honda Unit Sales
Source: Honda
Japan Automobile Operations
Unit(thousands)
Enhancement of product line-up- Introduce Civic series ( Civic sedan / Civic Hatchback
/ Civic Type R )
Strong sales momentum of key models- Vezel marked No.1 share in SUV segment in 2016- N-Box marked No.1 share in mini-vehicle segment in 2016
Civic Type R (Summer 2017)
Civic Hatchback(Summer 2017)
Civic Sedan(Summer 2017)
Honda Topics New Model Launches/ FMC
Improve capacity utilization through exporting global models ※Pictures of Civic series above are US or EU models for your reference. 28
New models
Being a global supply base of Civic Series
256
187
150 141 140 133 132 159
0
100
200
300
400
CY09 10 11 12 13 14 15 16Source: ACEA / Honda
Civic Sedan(Within 2017)
Civic Type R(Late 2017)
Civic Hatchback(Mar 2017)
- U.K factory to concentrate on producing Civic series and exporting to other countries like US.(Plan to export approximately 60K units per year)
- New Civic Hatchback was launched in March 2017- Civic Sedan will be introduced in 2017- New Civic Type R will be introduced in late 2017
14,508 13,743 13,542
12,452 12,240 12,913
14,095 15,132
0
5,000
10,000
15,000
20,000
CY09 10 11 12 13 14 15 16Source: ACEA / Honda
Industry Demand(excluding commercial vehicles)
Honda Topics
Honda Unit Sales(EU+EFTA )
New Model Launches/ FMC
Europe Automobile Operations
Unit(thousands)
Unit(thousands)
29
10,331
13,757 14,473 15,495
17,929 19,701
21,146
24,378
0
5,000
10,000
15,000
20,000
25,000
30,000
CY09 10 11 12 13 14 15 16
MinivanSUVMPVSedan
Strengthen Acura Brand- China specific TLX-L to begin production in China in 2017- New RDX will be launched and produced in China in 2018
580 652 622 599
757 793
1,010
1,256
0
300
600
900
1,200
1,500
CY09 10 11 12 13 14 15 16
AcuraSUVMPVSedan
※2008-2014 Wholesale
2015-2016 Retail
Further expand sister model strategy and introduce new powertrains- Avancier sister model, UR-V, launched at Dongfeng in Mar. 2017- Spirior Hybrid launched in Feb. 2017- Avancier 1.5 Turbo launched in Mar. 2017
Acura CDXHybrid
(In 2018)
Spirior Hybrid(Feb 2017)
Acura TLX-L(Within 2017)
CR-V(Announced in Apr 2017)
Source: Honda
Industry Demand(excluding commercial vehicles)
Honda Topics
Honda Unit Sales
Source: Honda
New Model Launches/ FMC
Acura RDX(In 2018)
China Automobile Operations
Unit(thousands)
Unit(thousands)
30
UR-V(Mar 2017)
1,642
2,244 2,393
3,100 3,305
2,952 2,720 2,676
0
1,000
2,000
3,000
4,000
CY09 10 11 12 13 14 15 16
Malaysia
Thailand
Indonesia
Philippines
189
234
177
282
367 349
393 412
0
100
200
300
400
500
CY09 10 11 12 13 14 15 16
Malaysia
Thailand
Indonesia
Philippines
※Retail Sales
Favorable sales of new models launched to meet specific market needs in each Asian market
- Big minor model change of City- New Civic is rolled out in Asia City (BMC)
Jan 2017 ThailandMar 2017 Indonesia(Announced)
CR-VMar 2017 ThailandJun 2017 Indonesia
Civic HatchbackMar 2017 Thailand
TBA Indonesia
Source: Honda
Industry Demand(Four main markets in ASEAN region)
Honda Topics
Honda Unit Sales
Source: Honda
New Model Launches/ FMC
Asia (ASEAN) Automobile Operations
Unit(thousands)
Unit(thousands)
31
1,748
2,249 2,403
2,596 2,443 2,525
2,744 2,802
0
1,000
2,000
3,000
4,000
CY09 10 11 12 13 14 15 16
A BC DE MPVSUV
63 63 49
73
107
175
195
165
0
50
100
150
200
250
CY09 10 11 12 13 14 15 16
A B
C D
E MPV
SUV
※Retail Sales
Expansion of dealer network
Industry Demand(excluding commercial vehicles,
and pickups)
Honda Topics
Honda Unit Sales
Source: Honda
New Model Launches/ FMC
Source: Honda
India Automobile Operations
Unit(thousands)
Unit(thousands)
WR-V(Mar 2017)
Launch of new models- All-new WR-V launched in March 2017.WR-V has less than 4m length, which has tax advantage for the customers.
- Big minor model change of City in Feb. 2017.City (BMC)(Feb 2017)
32
126 126
93
135 139 138
153
123
0
50
100
150
200
CY09 10 11 12 13 14 15 16
3,008
3,329 3,426 3,634 3,580
3,333
2,481
1,989
0
1,000
2,000
3,000
4,000
CY09 10 11 12 13 14 15 16Source: ANFAVEA
※Registration
Launch of new models- New Civic launched in August 2016 - All-new WR-V launched in March 2017
WR-V(Mar 2017)
Industry Demand(excluding trucks)
Honda Topics
Honda Unit Sales
Source: Honda
※Retail Sales
New Model Launches/ FMC
Improve FX Toughness- Increase local procurement and localization of development
Brazil Automobile Operations
Unit(thousands)
Unit(thousands)
33
Honda Business Status
Financial Highlights
Automobile Business Operations
Motorcycle Business Operations
Business Strategy
Honda Corporate Update
2030 Vision
34
0
4,000
8,000
12,000
16,000
2008 2009 2010 2011 2012 2013 2014 2015 2016
151 100 59 139 143 110 177 192 182 171
9.7%7.1% 5.2%
10.8% 10.6%8.2%
10.5% 10.4% 10.1% 9.9%
0.0
50.0
100.0
150.0
200.0
250.0
300.0
FY08 09 10 11 12 13 14 15 16 17
Honda Global Unit Sales
*excluding sales by Hero Honda
*Operating profit and margin until FY13 are based on US GAAP while FY14 and after are based on IFRS
Operating Profit and Margin
Overview of Motorcycle Business
Honda M/C Business = High Profitability + Stability + Growth Potential
Yen (billion)
Unit(thousand)
35
Mega ModelsAnnual sales of each of these “Mega Models” has grown to approximately 3 million units. By leveraging the scale merit of this sales volume we will further enhance the efficiency of our parts procurement activities.
Overview of Motorcycle Business
17.66FY2016
mil
Light Motorcycle110/125cc
ACTIVA 110cc1.9 mil
2.4 milScooter 110cc
3.6mil
Cub 110/125cc
2.3 mil
36
Indonesia
Malaysia
Thailand
VietnamIndia
PakistanChina
Japan
Bangladesh
Brazil
Argentine
PeruNigeria
Kenya
ItalyU.S.A
(ATV, S×S)Mexico
Philippines
27%
India17.7 mil
69%
Vietnam3.1 mil
74%
Indonesia5.9 mil
71%Brazil1.0 mil
79%
Thailand1.7 mil
21%U.S.A (MS+ATV)
0.7 mil
47%0.4 mil
16%Europe0.9 mil
Motorcycle productionat 34 plants in 21 countries
Motorcycle productionat 34 plants in 21 countries
Annual Production Capacity in India
5.8mil in 2016 6.4mil in 2017
*Market share excluding 50cc
Motorcycle Market Size and Honda Share (CY2016)
37
Next Markets Growing Markets Mature Markets
1,000
2,000
3,000
4,000
(USD)
India17.7 mil
Indonesia5.9mil
ThailandThailand
VietnamVietnam1.4mil
Pakistan
1mil
Philippines
Bangladesh0.8mil
Myanmar
GDP per capita 1.7mil
3.1mil
(CY2016)
Thailand
Vietnam
Indonesia
India
Number of motorcycles units in operationPopulation
1,292
255
91
6840%
33%
25%
8%
Significant growth expected
Motorcycle Market Penetration in Asia (millions)Source: Honda & IMF
0.2mil
0.4mil
Kenya
0.1mil
Nigeria
Growth in Motorcycle Popularity
38
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
2010 2011 2012 2013 2014 2015 2016
Motorcycle Market Share Trend in India
■ Scooter Unit Sales of Honda / Competitors and Honda Share in Scooter Market
18%
82%
In CY201132%
68%
In CY2016SC SC
MCMC
■ Fast Growing Segment Scooter / Motorcycle Sales Ratio (Industry)
0%
10%
20%
30%
40%
50%
60%
70%
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
2010 2011 2012 2013 2014 2015 2016
Competitors (Unit)
Honda (Unit)
Honda Share(%)
Honda
Honda has gained the No.2 market share position
IndiaIndia
Company C
Company A
Company B
Company D
Hero Honda
(Wholesale)
39
1.6 1.6 1.6 1.6 1.6
1.2 1.2 1.2 1.2 1.2
1.2 1.8 1.8 1.8 2.4
1.21.2
CY13 CY14 CY15 CY16 CY17(P)
Expanded annual production capacity to 6.4 mil.
1st
2nd
3rd4.0mil
4.6mil
6.4mil
4.6mil
Capacity Expansion
4th
Manesar
Rajasthan
Karnataka
Gujarat
3rd
2nd
4th
1st
Product Line-upProduct Line-up
110cc AT-Scooter
Activa
110cc AT-Scooter
Dio
110cc Motorcycle
Dream Yuga
125cc Motorcycle
CB Shine
India Motorcycle Operations
5.8mil
40
47% 48% 48% 51% 52%
0%
10%
20%
30%
40%
50%
60%
70%
0
500
1,000
1,500
2,000
FY13 14 15 16 17
Others
Honda
Share
Pakistan Myanmar
0% 1% 1%
9%12%
0%
10%
20%
30%
40%
50%
60%
70%
0
500
1,000
1,500
2,000
FY13 14 15 16 17
Others
Honda
Share
Bangladesh
0% 0%4% 5% 6%
0%
10%
20%
30%
40%
50%
60%
70%
0
250
500
750
1,000
FY13 14 15 16 17
Others
Honda
Share
< Pakistan >・Local production capacity was increased up to 1.35 million
units in 2016.・Increase dealer network and number of service shops・Expand model line-up by strengthening the
competitiveness of core 70cc models as well as introducing larger sized 125cc to 150cc models
< Myanmar >・Expand Model Line-up・Expand dealership network
< Bangladesh>・Expand dealership network・Cost reductions through increase in local procurement
Unit(thousands)
Unit(thousands)
Unit(thousands)
Honda Business Strategy
Motorcycle Business Operations in Next Markets
CD70
41
Honda Business Status
Financial Highlights
Automobile Business Operations
Motorcycle Business Operations
Business Strategy
Honda Corporate Update
2030 Vision
42
Honda Group Unit Sales
4Q Results (3 Months)
FY16 FY17 Change
Motorcycles 4,173 4,248 + 1.8%
Automobiles 1,229 1,285 + 4.6%
Power Products 1,955 2,218 + 13.5%
Consolidated Unit Sales
4Q Results (3 Months)
FY16 FY17 Change
Motorcycles 2,633 2,689 + 2.1%
Automobiles 980 960 - 2.0%
Power Products 1,955 2,218 + 13.5%
0
1,000
2,000
3,000
4,000
5,000
0
200
400
600
800
1,000
1,200
1,400
0
1,000
2,000
3,000
0
1,000
2,000
3,000
4,000
5,000
0
200
400
600
800
1,000
1,200
1,400
0
1,000
2,000
3,000
FY17 4th Quarter Unit Sales
(thousand)
(thousand)
Honda Group Unit Sales
Consolidated Unit Sales
FY16 FY17
Unit (thousand)
Motorcycles Automobiles Power Products
Unit (thousand)
Motorcycles Automobiles Power Products
Honda Group Unit Sales- Increase in motorcycle unit sales due mainly to sales growth in Pakistan and Vietnam, despite a decline in sales in Indonesia
- Increase in automobile unit sales due primarily to positive effect of new model introductions in China and Malaysia
4,173 4,248 1,229 1,285
1,9552,218
2,633 2,689980 960 1,955
2,218
43
Financial Results 4Q Results (3 Months)FY16 FY17 Change
Sales revenue 3,657.8 3,763.4 + 2.9%
Operating profit - 63.8 138.1 -
Operating margin - 1.7% 3.7% + 5.4ptShare of profit of investmentsaccounted for using the equity method 8.3 48.5 + 479.0%
Profit before income taxes - 58.7 186.9 -Profit for the periodattributable to owners of the parent - 93.4 95.9 -
Earnings per shareattributable to owners of the parent - 51.85 53.24 + 105.09
US Dollar 115 114 Yen up by 1yen
239.2
164.8 163.0
-63.8
266.8228.0
207.6138.1
-100
0
100
200
300
1Q 2Q 3Q 4Q
6.5%
4.6% 4.5%
-1.7%
7.7%7.0% 5.9%
3.7%
-2%
0%
2%
4%
6%
8%
10%
1Q 2Q 3Q 4Q
FY16FY17
FY17 4th Quarter Financial Results (Consolidated)
Yen (billion)
(Yen)
Market average rates (Yen)
Operating Profit Yen (billion)
FY16 FY17
Operating Margin
Financial SummarySales revenue increased 2.9% primarily due to an increase in revenues in financial services business operations and automobile business operations.
Operating profit increased by JPY 201.9 billion due primarily to cost reduction efforts and a decrease in SG&A expenses, including quality related costs, despite an increase in R&D expenses and negative foreign currency effects.
44
4,105 4,370 4,407 4,173 4,352 4,538 4,523 4,248
2,000
2,500
3,000
3,500
4,000
4,500
5,000
Japan 47 50 41 42 29 33 49 45North
America 75 75 69 89 78 71 68 77Europe 66 48 33 57 72 48 31 66
Asia 3,571 3,851 3,968 3,743 3,885 4,125 4,115 3,812Other
Regions 346 346 296 242 288 261 260 248Total 4,105 4,370 4,407 4,173 4,352 4,538 4,523 4,248
+ 75( + 1.8 % )
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4QFY16 FY17
Motorcycle - Honda Group Unit Sales(Motorcycles + All-Terrain Vehicles, etc.)
Vision(Vietnam)
Unit (thousand)
<North America>・Decreased sales of ATVs and motorcycles<Asia>・Increased sales in Pakistan, Vietnam and Thailand・Decreased sales in Indonesia
45
1,147 1,139 1,228 1,229 1,213 1,218
1,312 1,285
800
1,000
1,200
1,400
Japan 147 168 151 202 146 156 170 196North
America 497 473 466 493 510 479 510 471Europe 32 42 43 55 45 45 43 51
Asia 405 395 503 420 453 482 527 502Other
Regions 66 61 65 59 59 56 62 65Total 1,147 1,139 1,228 1,229 1,213 1,218 1,312 1,285
+ 56( + 4.6 % )
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4QFY16 FY17
Automobiles - Honda Group Unit Sales
Civic(China)
Unit (thousand)<North America>・Decreased sales mainly in the sedan segment・Positive impact of Civic Hatchback introduction<Asia>・China: positive impact of introductions of new models・Increased sales in Malaysia and Pakistan
46
- 58.7
- 17.2
+ 45.4
- 28.0
- 22.2+ 40.1 + 3.5
OperatingProfit
- 63.8
OperatingProfit
138.1
+ 223.9
―
Profit before Income Taxes + 245.6
Change in Profit before Income Taxes <FY17 4th Qtr>
Operating Profit + 201.9
186.9
<Increase Factors>- Decreased product warranty expenses, etc.
- JPY / USD- USD / Others (BRL, CAD, MXN)
- JPY / Asian Currencies(INR, THB, VND, CNY, IND)
- Others
- 17.0+ 3.0
- 4.5
- 3.7
- Currency Effects- Interest rate swap/currency swap - Others
+ 6.0- 9.0+ 6.6
Yen (billion)
FY16 4Q
FY17 4Q
Finance income and
finance costs
Revenue,model mix,
etc.
Cost Reduction,etc.
Decrease inSG&A
Increase inR&D
CurrencyEffects
Share of profit of investments
accounted for using the equity
method
Impact of pension
accounting treatment<Increase Factors>
- Cost reduction efforts, etc.
47
+ 1,079.3 - 511.4- 231.2 - 1.1
1,666.8 2,002.5
Net Change + 335.6
+ 1,430.5 - 709.0
- 306.8-126.2
1,378.5 1,666.8
Free cash flow+ 721.4 Net Change + 288.3
Free cash flow+ 567.9
Net Cash1,171.5
Net Cash1,524.8
Net Cash1,171.5
Net Cash785.9
Cash Flows of Non-financial Services Businesses
FY16 Twelve Months
FY17 Twelve Months
Cash & Cash equivalentsat end of period
Cash & Cash equivalentsat beginning of FY16
Cash & Cash equivalentsat beginning of FY17
Cash & Cash equivalents at end of period
Cash flows fromoperating activities
Cash flows from investing activities Cash flows from
financing activities Effect of exchange rate changes
Yen (billion)
Profit before income taxes + 419.3Share of profit of investment accounted for using the equity method - 126.0Depreciation* + 657.8Other + 479.3
Capital expenditures - 634.4Intangible assets - 232.3Other +157.7
Dividends paid - 158.6Others - 148.2
Profit before income taxes + 828.9Share of profit of investment accounted for using the equity method - 164.7Depreciation* + 671.4Other - 256.2
Capital expenditures - 493.7Intangible assets - 139.9Other +122.2
Dividends paid - 162.2Others - 69.0
Cash flows fromoperating activities
Cash flows from investing activities Cash flows from
financing activities Effect of exchange rate changes
* Depreciation, amortization and impairment losses excluding equipment on operating leases48
55.5 49.0 49.527.6 31.1
59.541.8 38.1
11.8% 10.8% 11.2%
6.3% 7.2%
14.5%
10.0% 8.4%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
0
20
40
60
80
100
120
140
FY16 FY171Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Honda GroupUnit Sales
(Consolidated Unit Sales)
4,105(2,545)
4,370(2,740)
4,407(2,654)
4,173(2,633)
4,352(2,831)
4,538(3,042)
4,523(2,675)
4,248(2,689)
Sales Revenue 472.7 453.2 442.1 437.2 432.4 409.3 420.6 453.7
+ 16.5 (Currency effect + 0.3)
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4QFY16 FY17
( + 3.8 % )
Motorcycle Business Sales Revenue /Operating Profit (Margin)
Unit (thousand)Yen (billion)
(excl. pension impact: 12.9% )
Operating Profit
Operating Margin
Yen (billion)
(+ 38.1 % )
<Increase Factors>・Cost reduction efforts, etc.
<Decrease Factors>・Negative foreign currency effects, etc.
49
130.767.7 69.5
-114.7
184.5131.8 129.8
54.9
4.8%
2.6% 2.6%
-4.2%
7.3% 5.5%
5.0%
2.0%
-6%
-3%
0%
3%
6%
9%
12%
15%
-150
-50
50
150
250
350
FY16 FY171Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Honda GroupUnit Sales
(Consolidated Unit Sales)
1,147(888)
1,139(889)
1,228(879)
1,229(980)
1,213(908)
1,218(890)
1,312(925)
1,285(960)
Sales Revenue 2,706.0 2,655.5 2,684.5 2,721.5 2,536.1 2,377.4 2,596.4 2,746.7
+ 25.2 (Currency effect - 34.9)
( + 0.9 % )<Increase Factors>・Decrease in SG&A expenses,
including quality related expenses・Cost reduction efforts , etc.
<Decrease Factors>・negative impact from
sales volume and model mix・Increase in in R&D expenses, etc.
Automobile Business Sales Revenue/Operating Profit (Margin)
(excl. pension impact: 2.4%)
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4QFY16 FY17
Unit (thousand)Yen (billion)
Operating Profit
Operating Margin
Yen (billion)
50
0.5
-3.8 -7.4
-20.2
0.5
-1.0 -6.3-2.7
0.6%-4.4%
-9.1%
-21.6%
0.7%
-1.4% -7.9%
-2.4%
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
-30
-20
-10
0
10
20
30
FY16 FY171Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Honda GroupUnit Sales
(Consolidated Unit Sales)
1,558(1,558)
1,275(1,275)
1,177(1,177)
1,955(1,955)
1,488(1,488)
1,240(1,240)
1,175(1,175)
2,218(2,218)
Sales Revenue 88.1 88.2 82.0 93.6 80.9 73.5 80.3 114.8
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4QFY16 FY17
+ 21.1 (Currency effect - 2.2) ( + 22.6 % )
Power Product & Other Businesses Sales Revenue/Operating Profit (Margin)
Operating profitfrom
aircraft and aircraft engines-12.1 -12.4 -17.1 -29.3 -8.8 -10.6 -12.3 -12.0
(For reference)
(excl. pension impact: - 4.4%)
Unit (thousand)Yen (billion)
Operating Profit
Operating Margin
Yen (billion)
<Improve Factors>・ Decrease in expenses in other
businesses operations, etc.
51
52.4 51.8 51.4 43.5 50.537.7 42.3 47.7
11.0% 11.1% 11.5% 9.5% 10.8%8.5% 9.3% 9.2%
-15%
-10%
-5%
0%
5%
10%
15%
20%
0
20
40
60
80
100
120
FY16 FY171Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Total Assets of Finance Subsidiaries 9,560.2 9,377.7 9,431.9 9,071.8 8,538.3 8,440.3 9,643.3 9,437.0Sales Revenue 476.8 465.1 447.8 459.8 467.9 446.3 455.7 521.1
( + 13.3 % )+ 61.3 (Currency effect - 5.9)
( + 9.6 % )
<Increase Factors>・Increase in operating lease revenues, etc.
<Decrease Factors>・Increase in SG&A expenses, etc.
Financial Services Business Total Assets/Sales Revenue/Operating Profit (Margin)
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4QFY16 FY17
Operating Profit
Operating Margin
Yen (billion)
Yen (billion)
52
-180.4
26.4 21.8 65.7
-19.7 -41.8
105.5 15.4 67.7
2.0
-200
-150
-100
-50
0
50
100
150
- 29.6 % + 3.1 %+ 298.9 %
Sales Revenue/Operating Profit by Geographical Segment <FY17 4th Qtr>
Japan North America Europe Asia Other
Regions4Q 4Q 4Q 4Q 4Q
FY16 FY17 FY16 FY17 FY16 FY17 FY16 FY17 FY16 FY17
Sales Revenue 997.2 1,076.9 2,102.6 2,134.0 229.7 257.3 841.1 946.3 163.4 199.8
Yen (billion)
Operating Profit: Yen (billion)
4Q 4Q 4Q 4Q 4QFY16 FY17 FY16 FY17 FY16 FY17 FY16 FY17 FY16 FY17
53
38.3 34.145.0
8.3
27.2
39.849.1 48.5
0
10
20
30
40
50
+ 40.1( + 479.0 % )
From Asia 32.5 28.9 39.4 24.3 39.3 36.2 40.8 43.8
Share of Profit of InvestmentsAccounted for Using the Equity Method
Yen (billion)
Yen (billion)
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4QFY16 FY17
54
FY17Results
FY18Forecast
Change
amount %
Sales revenue 13,999.2 14,200.0 + 200.8 + 1.4%
Operating profit 840.7 705.0 - 135.7 - 16.1%
Operating margin 6.0% 5.0% - 1.0 ptShare of profit of investmentsaccounted for using the equity method
164.7 175.0 + 10.2 + 6.2%
Profit before incometaxes 1,006.9 875.0 - 131.9 - 13.1%
Profit for the yearattributable to owners of the parent 616.5 530.0 - 86.5 - 14.0%
Earnings per shareattributable to owners of the parent 342.10 294.07 - 48.03
FY18 Financial Forecast (Consolidated)
US Dollar 108 105 Yen up by 3 yen
Yen (billion)
(Yen)
Market average rates (Yen)
55
FY17Results
FY18Forecast Change FY17
ResultsFY18
Forecast Change FY17Results
FY18Forecast Change
Japan 156 170 + 14 603 615 + 12 301 265 - 36North
America 294 315 + 21 1,970 1,920 - 50 2,977 3,010 + 33Europe 217 220 + 3 184 175 - 9 1,035 1,030 - 5
Asia 9,513 10,465 + 952 684 730 + 46 1,430 1,460 + 30Other
Region 1,057 1,050 - 7 242 245 + 3 378 400 + 22Total 11,237 12,220 + 983 3,683 3,685 + 2 6,121 6,165 + 44
FY17Results
FY18Forecast Change FY17
ResultsFY18
Forecast Change FY17Results
FY18Forecast Change
Japan 156 170 + 14 668 680 + 12 301 265 - 36North
America 294 315 + 21 1,970 1,920 - 50 2,977 3,010 + 33Europe 217 220 + 3 184 175 - 9 1,035 1,030 - 5
Asia 15,937 17,015 + 1,078 1,964 2,060 + 96 1,430 1,460 + 30Other
Region 1,057 1,050 - 7 242 245 + 3 378 400 + 22Total 17,661 18,770 + 1,109 5,028 5,080 + 52 6,121 6,165 + 44
"Honda Group Unit Sales"
Motorcycles Automobiles Power Products
“Consolidated Unit Sales"
Global Honda group unit sales including affiliates, such as China Auto and Motorcycle in Indonesia
Consolidated unit sales do not include sales units in affiliates
(thousand)
Motorcycles Automobiles Power Products(thousand)
FY18 Guidance: Units Sales by Business Segment [IFRS]
56
Profit before Income Taxes - 131.9 ( - 13.1 % )
1,006.9
875.0
+ 59.3+ 75.0 - 37.0 - 54.0
- 95.0
+ 10.2 - 6.4
Operating Profit - 135.7 ( - 16.1 % )
- 84.0
FY18 Forecast: Change in Profit before Income Taxes
Finance income and
finance costs
Revenue,model mix,
etc.
Cost Reduction,etc.
Increase inSG&A Increase in
R&DCurrencyEffects
Share of profit of investments
accounted for using the equity
method
Impact of pension
accounting treatment
- JPY / USD - USD / Others
(BRL, CAD, MXN)- JPY / Asian Currencies
(INR, THB, VND, CNY, IND)- Others
- 38.0- 1.5
- 13.0
- 42.5 OperatingProfit
705.0
OperatingProfit
840.7
FY17Results
FY18Forecast
Yen (billion)
57
0%
2%
4%
6%
8%
0
200
400
600
800
FY11 12 13 14 15 16 17 18P0%
2%
4%
6%
8%
0
200
400
600
800
FY11 12 13 14 15 16 170%
2%
4%
6%
8%
0
200
400
600
800
FY11 12 13 14 15 16 17 18P
Capital Expenditures Depreciation
Actual Amounts % against Sales
US GAAP IFRS US GAAP IFRS US GAAP IFRS
R&D Expenditures
FY18 Forecast: Capital Expenditures, Depreciation and R&D
FY17Results
FY18Forecast
Change
Capitalexpenditures * 541.0 530.0 - 11.0
Depreciation andamortization * 437.6 450.0 + 12.3
Research and developmentexpenditures **
685.3 750.0 + 64.6
* Capital expenditures as well as Depreciation and amortization in results and forecast aforementioned exclude investment in operating leases, finance leases and intangible assets
** Research and development expenditures are research and development activity related costs incurred during the reporting period. In accordance with IFRS, a portion of research and development expenditures is recognized as an intangible asset and amortized over its estimated useful life. As such, this amount is not in conformity with "Research and development" on our Consolidated Statement of Income.Research and development expenditures aforementioned exclude decrease of 25.4 billion yen due to the impact of pension accounting treatment in FY17 2nd quarter.
Yen (billion)
58
Dividend per Share FY16 FY17( Projection) FY18
(Expectation)Increase/
Decrease fromFY16
Increase/Decrease from
FY17
1st Quarter End 22 22 - ( 24 ) ( + 2 )
2nd Quarter End 22 22 - ( 24 ) ( + 2 )
3rd Quarter End 22 24 + 2 ( 24 ) ( - )
4th Quarter End 22 ( 24 ) ( + 2 ) ( 24 ) ( - )
Fiscal Year 88 ( 92 ) ( + 4 ) ( 96 ) ( + 4 )
Dividend
Yen
59
Caution with Respect to Forward-Looking Statements:This slide contains forward-looking statements about the performance of Honda, which are based on management’s assumptions and beliefs taking into account information currently available to it. Therefore, please be advised that Honda’s actual results could differ materially from those described in these forward-looking statements as a result of numerous factors, including general economic conditions in Honda’s principal markets and fluctuation of foreign exchange rates, as well as other factors detailed from time to time.Accounting standards: Our consolidated financial standards are prepared in conformity with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (IASB)Notice on the Factors for Increases and Decreases in Income:With respect to the discussion above of the change in Operating profit, management has identified the factors set forth below and used what it believes to be a reasonable method to analyze the respective changes in such factors. Each of these factors is explained below. Management has analyzed changes in these factors at the levels of the Company and its material consolidated subsidiaries.(1)“Currency effects” consist of translation adjustments, which come from the translation of the currency of foreignsubsidiaries’ financial statements into Japanese Yen, and foreign currency adjustments, which result from foreign-currency-denominated sales, which, at the levels of the Company and those consolidated subsidiaries which have beenanalyzed, primarily relate to the following currencies: U.S. dollar, Canada dollar, Euro, GBP, BRL and Japanese Yen.(2) With respect to “Cost reduction, etc”, management has analyzed cost reduction and effects of raw material costfluctuations at the levels of the Company and its material foreign manufacturing subsidiaries in North America, Europeand other regions.(3) With respect to “Revenue, model mix, etc”, management has analyzed changes in sales volume and in the mix ofproduct models sold in major markets which have resulted in increases/decreases in profit, as well as certain otherreasons for increases/decreases in sales revenue and cost of sales.(4) With respect to “Selling, General and Administrative expenses”, management has analyzed reasons for anincrease/decrease in selling, general and administrative expenses from the previous fiscal year net of currencytranslation effects.(5) With respect to “Research and Development expenses”, management has analyzed reasons for an increase/decreasein research and development expenses from the previous fiscal year net of currency translation effects.
60