What’s Driving Honda’s Unit Pricing Growth

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

Honda Motor (NYSE: HMC) has grown its units sold outside Japan from 2.3 million in 2011 to close to 3.7 million over the last five year period (2011-2015). Over the same period, its revenue from automotive sales in these geographies has grown from $52.8 billion to $89.2 million. That is, unit sales have grown by close to 60% over the period, but revenue has grown by over 70%, implying that unit pricing has grown faster than unit sales.

On closer inspection, one finds that unit pricing in North America has grown much faster than international transaction prices. Revenue in North America has grown from $30 billion in 2011 to $47 billion in 2015, while it has only grown from $23 billion to $28 billion internationally. Given Honda’s strong position in the passenger car market (with the Civic and Accord, two of the highest selling vehicles in this segment), and its increasing presence in the light trucks market (through the CR-V, Odyssey and Pilot models), we expect the same trend to continue in the future and as a result we forecast its unit pricing to also grow.

hmc unit pricing

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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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