Automotive Segment To Push Honda Motor’s Top Line Growth?
Honda Motor Co. (NYSE: HMC), whose stock currently trades at around $26, generates its revenue primarily from its Automotive segment, which is projected to account for 69.8% of total revenues in 2019, While the Motorcycle segment is expected to contribute 13.6% to the top line. In this note we discuss the revenue segments of Honda, their historical performance, and expected Total Revenue for 2020. You can look at our interactive dashboard analysis ~ Honda Motors Revenue: How does Honda make money? ~ for more details. In addition, here is more Consumer Discretionary data.
Honda Motors Business Model:
What Does Honda offer?
- Honda Motor Co., Ltd. was incorporated in September 1948 as Honda Giken Kogyo Kabushiki Kaisha. It was formed as a successor to the unincorporated enterprise established in 1946 by the late Soichiro Honda to manufacture motors for motorized bicycles.
- The company develops, manufactures and markets motorcycles, automobiles and power products globally.
Has 4 Operating Segments:
- Motorcycle Business: The principal products for the business would be: Motorcycles, all terrain vehicles (ATVs), side by sides (S×S), and relevant parts. The functions can be categorized as Research and development, Manufacturing, and Sales and related services.
- Automobile Business: The principal products for the business would be all kind of cars, vans, and relevant parts. The functions can be categorized as Research and development, Manufacturing, and Sales and related services.
- Financial Services: The segment provides financial services for purchasing or leasing vehicles of the company.
- Life Creation and Other Business: The principal products for the business would be power products, its relevant parts, and others. The functions can be categorized as Research and development, Manufacturing, and Sales and related services.
What Are The Alternatives?
- Major competitors are companies like Daimler AG, Volkswagen, Ford, Toyota Motors, Tata Motors, and General Motors.
What Is The Basis of Competition?
- The principal factors that determine consumer vehicle preferences include overall vehicle design, price, quality, available options, safety, reliability, fuel economy, and functionality. Market leadership in individual countries in which they compete varies widely.
Honda Motors Total Revenue has grown by 10.4% between 2017 and 2019, and is expected to grow by 2.9% in 2020:
- Honda Motors’ total revenues grew from $129.6 billion in 2017 to $143.1 billion in 2019. This represents an increase of 1.1x.
- We forecast the revenues to be around $147.2 billion in 2019, reflecting a growth of 2.9% y-o-y.
Revenue growth of about $13.5 billion over two years driven primarily by contribution from Automotive Revenue:
- Automotive Revenue has increased continuously over the years as sales volume has shown good growth. It increased from $93.4 billion in FY 2017 to $99.7 billion in FY 2019. Trefis estimates FY 2020 revenue to be around $102.8 billion.
- Motorcycle Revenue has increased continuously over the years as sales volume has shown good growth. It increased from $15.9 billion in FY 2017 to $18.9 billion in FY 2019. Trefis estimates FY 2020 revenue to be around $20.1 billion.
- Life Creation business Revenue has increased continuously over the years as pricing has shown good growth. It increased from $2.9 billion in FY 2017 to $3.2 billion in FY 2019. Trefis estimates FY 2020 revenue to be around $3.3 billion.
- Financial Services revenue has grown as the interest rate went up. It increased from $17.4 billion in FY 2017 to $21.3 billion in FY 2019. Trefis estimates FY 2020 revenue to be around $21.1 billion.
What’s behind Trefis? See How It’s Powering New Collaboration and What-Ifs
For CFOs and Finance Teams | Product, R&D, and Marketing Teams
Like our charts? Explore example interactive dashboards and create your own.