How Will The Yen Impact Honda’s Profits Going Forward?

-13.05%
Downside
37.32
Market
32.45
Trefis
HMC: Honda Motor logo
HMC
Honda Motor

Honda Motor (NYSE: GM) has seen the ratio of its automotive revenue to operating expense increase notably between 2013 and 2015, due to the impact of a weak yen and a strengthening dollar. Since, Honda gets a large proportion of its overall sales from North America and much of its production is based in Japan and emerging markets like Mexico, its revenues grew faster than costs in dollar terms. The yen fell by almost 33% of its value over this period, but since the beginning of 2016, the trend has reversed and the yen has been appreciating with respect to the dollar. As a result, we expect Honda’s operational efficiency to decline in the coming period.

hmc opefHave more questions about auto companies? Click on the links below:

Notes:

Relevant Articles
  1. Growth Of Chinese EV Players A Looming Threat For Honda Stock?
  2. What’s Happening With Honda Stock?
  3. Honda Stock Looks Like A Buy Following Strong Q3 Results
  4. Is Honda Stock A Buy As Motorcycle Business Shines?
  5. Is Honda Stock A Buy At $27?
  6. Forecast Of The Day: Average Price of Honda Vehicles

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com

2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Honda Motor

See More at Trefis | View Interactive Institutional Research (Powered by Trefis) Get Trefis Technology