Which Geographies Have Been Driving Honda’s Automotive Revenue?

-10.93%
Downside
36.43
Market
32.45
Trefis
HMC: Honda Motor logo
HMC
Honda Motor

The Japanese Auto maker Honda Motor (NYSE: HMC) has seen the contribution of automotive revenue from North America climb from 44% in 2011 to over 53% in 2015, while contribution from Japan fell from 22.2% to 14.9%. The reasons for this are three fold: 1) Honda’s sales in North America have grown from just under 1.1 million in 2011 to 1.65 million in 2015, 2) Honda’s sales in Japan have fallen from just over 711,000 in 2011 to just under 687,000 in 2015, 3) The yen lost nearly one third of its value against the U.S. dollar between the 2013-2015 period. Over the same period, growing sales in the International region (comprising Europe, China and emerging markets such as India and Brazil) offset the impact of the strong U.S. dollar.

hmc comp

Going forward, we expect international sales to continue growing more important while a slowdown in the U.S. passenger car market reduces the overall contribution made by North America. Japan’s unfortunate combination of high market penetration, stagnant economy and ageing population might combine to reduce its contribution further.

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Notes:

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

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