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May 14, 2007 – Honda’s N. America sales fall

May 14, 2007
Filed under Features

For the third straight year, Honda Motor Co. is reporting reduced sales of new motorcycles, ATVs and PWC in North America.
The manufacturer’s 2007 fiscal-year report shows its powersports segment sales dropped 18 percent and its motorcycle sales fell 15 percent compared to its 2006 fiscal year. Those numbers represent new unit sales in Mexico, Canada and the United States for its fiscal year, which ended March 31.
The 503,000 powersports vehicles Honda sold in North America during its 2007 fiscal year is nearly a 22 percent drop from two years ago and represents the fewest new powersports vehicles the Japanese manufacturer has sold in one year in North America since 2000.
The global motorcycle picture is much brighter for Honda, which reported a 1 percent increase in sales for all of its worldwide motorcycle markets.
That slight rise was mostly because of sales gains made in Latin America and other areas Honda refers to as “other regions.”
The Overall Picture
For all of its business segments, including auto, Honda Motor Co. showed nearly a 12 percent gain in revenue compared to its past fiscal year. Some of that increase is because of an improved exchange rate. Honda estimated its revenue gains would have been 7.4 percent if the Japanese yen would have remained unchanged from the previous year.
Honda’s total revenue in 2007 was $93.9 billion, as its new automobile business grew nearly 8 percent.
The company’s net income of $5.01 billion, however, dropped slightly — 0.8 percent — this fiscal year compared to a year ago. Fourth-quarter powersports segment and motorcycle sales in North America were down in fiscal 2007 compared to the previous year. Honda powersports segment sales in its fourth quarter, which ended March 31, totaled 164,000 new units. That’s a 22 percent dip from the previous year. Sales of new motorcycles also declined in North America by 18 percent compared to the past-year fourth quarter.
Sales of Honda’s ATVs and PWCs have slipped more in the past three years than its motorcycle sales, although both have suffered declines. Honda reported sales of 282,000 motorcycles in its 2007 fiscal year, an 18.5 percent decrease from 2005. Its sales of new ATVs and PWCs, however, have fallen 25.5 percent in the same time period.
North American motorcycle segment sales now represent less of Honda’s total worldwide motorcycle revenue than two years ago. Honda reported revenue of $2.5 billion from its motorcycle segment sales in North America this year. That represents 22.5 percent of the company’s overall motorcycle segment sales. That’s nearly 7 percentage points less than just two years ago.
Looking Ahead
Looking forward, Honda expects its net sales to improve by more than 3 percent in the first half of its fiscal year 2008, which ends Sept. 30. It doesn’t expect that sales increase to last the fiscal year, however, forecasting a slight sales decrease in 2008 by 0.5 percent. psb

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