Honda Motor Company is Japan's #3 automaker (after #1 Toyota and #2 Nissan) and the world's largest motorcycle producer. The company's global car models include the Accord, CR-V, Civic, Fit and its new Clarity Fuel Cell model. Honda's line of motorcycles includes everything from scooters to superbikes. The company’s power products division makes commercial and residential machinery (lawn mowers, snow blowers, and tillers); portable generators; and outboard motors. Its Honda Aero subsidiary also manufactures jet and turboprop engines. More than 85% of Honda Motor sales come from outside Japan.
Four reporting segments comprise Honda Motor's operations: the Automobile business (about 70%), the Financial Services business (about 15%), the Motorcycle business (more than 10%), and Power Products and Other Businesses (less than 5%).
Honda’s major geographic areas are concentrated in North America (the US, Canada, and Mexico); Asia (Thailand, Indonesia, China, India, Pakistan, and Vietnam); Japan; and Europe (the UK, Germany, France, Italy, Spain, Switzerland, Portugal, the Netherlands, and Belgium). It also has a major presence in Russia and Brazil. North America generates more than 55% of net sales while Asia brings in almost 20%. Japan accounts for less than 15% and Europe about 5%. The Financial Services business provides financing and leasing through its subsidiaries in Japan, the US, Canada, the UK, Germany, Brazil and Thailand.
Honda has seen robust increases in sales since 2012. In 2017, despite Honda’s increased unit sales and a revenue increase in its Financial Services business, its consolidated sales revenue decreased more than 4% due to negative foreign currency effects.
Net income increased almost 80% mainly due to a decrease in selling, general, and administrative expenses (mostly product warranty expenses), cost reduction efforts, and increased sales revenue.
Cash flows from operations decreased more than 36%. Factors included higher retirement benefit liabilities and higher income taxes paid.
As part of its “2030 Vision” strategic plan, Honda is focusing on areas like mobility, robotics, and energy solutions. Its new R&D Center X program began operations in 2017 and is focused on strengthening development in these technologies across the enterprise.
Honda is also investing in the areas of environment and safety. As of 2017, Honda has acquired ISO 14001 environmental certification for all its existing manufacturing plants and is seeking certification for any newly-built plants. In its Automobile business, the company is aiming for a “collision-free mobile society” and is working on more safety education for customers, enhanced vehicle safety technology, and its telecommunication networks. It’s currently analyzing data collected from Thailand’s high traffic incidents to develop more safety-related technology.
The company is also working to optimize operational efficiency globally and identifying commonalities in its regional models for greater efficiencies in each region.
The carmaker is continually collaborating with third parties to promote innovation and has been working on self-driving technology in a joint venture with Waymo, a subsidiary of Alphabet, Inc. (parent company of Google). Honda also has established JVs with GM for an advanced hydrogen fuel cell system, and with Hitachi for the development of motors for electric vehicles.
Honda is working on a project to further advance its SED development system where development teams, production teams, and sales teams work together to form one project team to pursue product development.
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President: YOSHIYUKI MATSUMOTO