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Spacy 100 A four-stroke, 100cc scooter made by Wuyang
– Honda Motors (Guangzhou) of China and imported to Japan utilizing Honda's
global network.
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FISCAL 2004 RESULTS
Unit sales of Honda motorcycles, all-terrain vehicles (ATVs)
and personal watercraft (PWC), in fiscal 2004 posted a solid 13.9% increase, to
9,206,000 units. This was due mainly to outstanding performance in Asia, where
we reported a significant jump in sales of finished products, as well as in motorcycle
parts supplied to affiliates for mass production by the parent company and its
subsidiaries. As a result, net sales advanced 1.9%, to ¥996.2 billion, despite
a negative translation effect. Operating income fell 25.9%, to ¥42.4 billion,
and the operating margin was 4.3%.
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UNIT SALES
Years ended March 31
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UNIT SALES
Years ended March 31
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NET SALES
Years ended March 31
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NET SALES
Years ended March 31
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JAPAN
In Japan, unit sales declined 6.7%, to 403,000 units. Sales
of mini-sized motorcycles (126cc – 250cc) were solid, supported by strong
sales of scooters, as were second-class motor-driven cycles (51cc – 125cc),
which benefited from robust demand from corporate users. However, sales of 50cc
and smaller models slowed following the initial popularity of newly released,
low-priced scooters and the generally declining demand in the second half of the
year. Sales of small-sized motorcycles (over 250cc) also declined, due to falling
demand.
With respect to mini-sized and small-sized motorcycle models, one of the year's
highlights was the strong performance of the Fusion model following a full
model change at the end of the previous fiscal year. During this fiscal year,
we upgraded our lineup with the introduction of the Forza Type X. We also
released the XR250 Motard and the CBR600RR, the latter of which
features advanced RC211V technologies incorporated in high-performance
MotoGP victory machines.
Taking advantage of the success of the Today scooter, we launched two new Chinese-made
models – Spacy 100 and Dio – that are fully equipped and
environmentally friendly. In February 2004, we unveiled the Smart Dio Z4,
which incorporates the world's first electronic fuel injection system (Honda Programmed
Fuel Injection System, or PGM-FI) for four-stroke 50cc scooters.
In these ways, we worked to upgrade our lineup of attractive models with both
high-value-added leisure use and competitive price models in commuting use.
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NORTH AMERICA
In North America, unit sales rose 7.5%, to 656,000 units.
New products launched in fiscal 2004 included the Valkyrie Rune, a flagship
custom bike with attractive styling, and the CBR600RR, VTX1300C
and CRF250R. Healthy sales of the XR/CRF series for kids and other
models, such as the CRF450R and the Brazilian-made CRF230F and CRF150F,
led to an 11.1% increase in unit sales of bikes, to 360,000 units. In June 2003,
we commenced sales of the FourTrax Rancher AT, a 400cc ATV fitted with
Honda's original automatic transmission, and in January 2004 we launched the TRX450R,
a flagship sports ATV. Despite slow sales during the first half of the fiscal
year, the launch of these new models, coupled with aggressive marketing strategies
and competitive pricing in the second half of the year, resulted in higher overall
sales. Consequently, unit sales of ATVs and PWC for the year rose 3.5%, to 296,000
units.
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EUROPE
In Europe, unit sales declined 2.0%, to 299,000 units.
We began importing and selling the Indian-made Lead scooter and the Brazilian-made
XR125L, which is appropriate for both on- and off-road use. Both models
were well received by the market. In the second half of the year, we released
the CBR1000RR, the Italian-made CBF600, and the Thai-made CBR125R,
and each of these models recorded steady sales. The CBR600RR, one of our
mainstay products, took the No. 1 spot in Europe's super sports category. In Germany,
the CBF600 and the CBR125R earned first and second place, respectively,
in registrations for the first three months of 2004 in their particular categories.
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ASIA
In the Asian region, demand for motorcycles as a principal
means of transportation has continued to grow. Total unit sales of motorcycles
and motorcycle parts sold by Honda and its subsidiaries to affiliates in the region
jumped 18.0%, to 7,017,000 units.
By country, sales in Thailand rose 24.4%, to 1,307,000 units. This was due to
continued healthy sales of the popular Wave100, the affordable Wave
Z and the Wave125i, which features a PGM-FI that delivers both favorable
fuel economy and low emissions.
P.T. Astra Honda Motor, an affiliate in Indonesia, recorded strong sales of the
mainstay Supra, and in October 2003 it launched the affordable Supra
Fit. Local sales by P.T. Astra Honda Motor in calendar 2003 totaled 1,576,000
units.
In India, we enjoyed healthy sales of the top-selling Splendor, made by
our affiliate Hero Honda Motors Ltd. (HHML). HHML also launched the CD Dawn,
a 100cc sports bike. Honda Motorcycle & Scooter India (Private) Ltd. (HMSI), a
subsidiary, launched the Eterno, a sleek 150cc geared scooter with a sophisticated
design and good fuel economy. Unit sales for both companies rose 29.5%, to 2,346,000
units.
In China, Sundiro Honda Motorcycle Co., Ltd., one of three motorcycle affiliates
in China, recorded healthy sales of the Wave and Jialing-Honda Motors Co.,
Ltd. unveiled the CB125X, a sports bike with a sharp design that was wellreceived
by the market. Sales of three affiliates, including Wuyang-Honda Motors (Guangzhou)
Co., Ltd. for calendar 2003 rose 23.3%, to 1,136,000 units.
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OTHER REGIONS
In other regions – covering Latin America, the Middle
East and Africa and Oceania – unit sales grew 5.9%, to 831,000 units.
In Brazil, where the motorcycle market has continued to grow steadily, we launched
the CG150 Titan in February 2004. This was the first full-model
change since the CG125 series was introduced more than four years earlier.
The market response has been overwhelming.
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OUTLOOK FOR FISCAL 2005
In the year ending March 2005, we project that unit sales
of motorcycles, ATVs and PWC, will edge up 0.9%, to 9,290,000 units.
By increasing local procurement of parts for Honda motorcycles produced and sold
by our Asian affiliates, we are striving to enhance product competitiveness and
expand our business in the region. This will lead to an increase in 100% locally
procured models, which are not included in Honda's unit sales. Specifically, the
number of such motorcycles is projected to increase approximately 1,000,000 units
in fiscal 2005, to 1,500,000 units, based on local sales projections.
In Japan, we will introduce a number of new models. In the growing mini-sized
scooter category, we launched a new version of the mainstay Forza series
in April 2004. In the sports model category, we unveiled the CBR1000RR,
which features advanced RC211V technologies incorporated in highperformance
MotoGP victory machines.
In June 2004, we launched the PS250, the fifth model in the N-project,
which is aimed at the younger generation. Under this project, Honda's young designers
were given free range with their ideas, resulting in simple, yet unique designs.
We also upgraded our lineup in the mass-market commuter category, introducing
the Dio Cesta, the fourth model manufactured and imported from China.
For fiscal 2005, we estimate unit sales in Japan of 370,000 units, amid a trend
of declining demand that began in the autumn of 2003.
In North America, overall demand in calendar 2003 totaled approximately 1.88 million
units, up 5.0% from 2002, and we expect demand to grow moderately again in 2004.
Against this background, models introduced in the latter half of the period under
review will contribute to fiscal 2005 results throughout the year. We will continue
pursuing initiatives undertaken since the latter half of calendar 2003, centering
on the timely introduction of new models and the pursuit of appropriate marketing
strategies. For fiscal 2005, we are targeting sales of 715,000 units in North
America, up 9.0%.
Although we expect the motorcycle market in Europe to remain largely unchanged,
Honda is planning to sell 295,000 units. Factors in this increase include the
new CBR1000RR and CBF600 models, which have been recording healthy
sales since being launched in fiscal 2004 and will make a fullyear contribution
to sales in fiscal 2005. We also expect an increase in sales of affordable bikes,
such as the Brazilianmade XR125L and the Thai-made CBR125R, which
have already been well-received by the market.
For fiscal 2005, we project overall unit sales in Asia to remain largely unchanged,
at 6,980,000 units. Sales of 100% locally procured Honda motorcycles produced
and sold by affiliates are forecast to increase approximately 1,000,000 units.
In Thailand, where Honda holds a market share of over 70%, we will pursue a number
of activities to boost sales. These include providing high-quality services to
complement our products, as well as enhanced rider safety initiatives and increased
efforts to develop an amateur participation-type motor sports culture.
By adding design development and prototype testing functions to our motorcycle
research center in Thailand, we will strengthen research and development of motorcycles
aimed at the ASEAN region.
In Indonesia, P.T. Astra Honda Motor plans to launch a derivative of the popular
Karisma in July 2004, targeting the younger generation and women. Combined
with efforts to expand sales of products with high added value, they expect to
post record sales for calendar 2004.
In India, our aim is to increase sales through the launch of new locally-produced
models and by continuing to enhance the dealer network. By March 2004, HHML's
annual production capacity had risen to 2,400,000 units and HMSI's capacity to
450,000 units, for a total of 2,850,000. We plan to reach full-scale production
during fiscal 2005.
With respect to the Chinese market, in June 2004 our affiliate Sundiro Honda Motorcycle
launched the 125cc Xin-Gaian, which delivers enhanced driving performance
and handling while consuming minimal fuel. Sales of the Ziyou Today, which
is already available in the Japanese market as the Today, commenced in
June in China. Moreover, various models produced by our Chinese joint venture
companies already meet the Euro 2 exhaust emission regulations, which were introduced
in 2004, thanks to the adoption of Honda's leading low emission technologies.
Sundiro Honda Motorcycle began construction of a new plant in Tianjin in May 2004,
with the aim of improving production and distribution efficiency. The new facility
is scheduled for completion at the end of 2004.
Unit sales in other regions are expected to increase 11.9%, to 930,000 units.
In Brazil, where Honda claims a more than 80% share of the motorcycle market,
total annual demand is fast approaching 1,000,000 units. We therefore expect to
post record-high sales in Brazil in fiscal 2005. We will raise the annual production
capacity of our Brazilian plants by 250,000 units, to 1,000,000, by the end of
2004, to meet this huge domestic demand, as well as growing overseas demand. In
the Middle East and Africa, we plan to increase sales of highly competitive products,
including motorcycles made in China, India, Thailand and Brazil.
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CBR1000RR Newly designed 1000cc, liquid-cooled, four-stroke,
DOHC incline four-cylinder engine, featuring advanced racing technologies inherited
from Honda's RC211V, which in 2003 won the ultimate challenge, the MotoGP
World Championship Series, for the second successive year.
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