[Company analysis] Honda Motor Co., Ltd. (本田技研工業)

「Honda Motor Co., Ltd. (本田技研工業)」manufactures motorcycles, automobiles, aircraft, general-purpose products (cultivators, lawn mowers, snowplows, generators, outboard motors, solar cells, etc.) In particular, they have a world-class share in the fields of automobiles and motorcycles. The number of consolidated employees is approximately 219,722.

 

1. Company Profile

2. Summary and Features

3. Major Business

4. Financial Information

 

 

 

1. Company Profile

 

※Unit is JPY million, as of 2019

Company name	Honda Motor Co., Ltd.
Company name (Japanese)	本田技研工業
Date of establishment	September 1948
Headquarters location	〒107-8556 東京都港区南青山二丁目1番1号
Capital	86,000
Consolidated sales	15,888,617
Consolidated operating profit	726,370
Consolidated total assets	20,419,122
Consolidated capital	8,565,790
Capital adequacy ratio	41.9%
Consolidated number of employees	219,722

 

 

 

2. Summary and Features

 
「Honda Technical Research Institute(本田技研研究所)」which is the predecessor of the current「Honda Motor」was founded by Honda Soichiro(本田宗一郎). From its establishment, they started manufacturing and researching internal combustion engines and various machine tools. And this, leads them to the motorcycle business.

In 1958,「Honda Motor」released the "Super Cub C100", which emphasizes practicality such as ease of riding and lightness, referring to scooters sold in Europe and elsewhere. This is the beginning of legendary motorcycle business of「Honda Motor」. The "Super Cub" has been in production since it was released in 1958 and is said to have produced more than 100 million units so far. Based on this data, it is the most popular transportation in human history. "Super Cub" has excellent endurance, fuel efficiency and durability, and the specifications. Even the most latest model of "Super Cub" only has minor differences with the inital model.

From 1963, they decided to enter four-wheeled automobile market. At the same time, they set up a motorcycle production base in Europe. 「Honda Motors」started to export their products to China from 1973, and started local production of motorcycle-related parts from 1982 by making a technical partnership with a local company. Since 1998, they have established「Guangqi Honda Automobile Co Ltd」together with「Guangzhou Automobile Group Co., Ltd.」. Nowadays, 「Guangqi Honda Automobile」produces over 240,000 units alone. This success in China is evaluated as a ideal model of globalization of Japanese companies.

However, although it has maintained the top market share in the motorcycle market so far, their sales in Japan has been shrinking year by year. because the popularity of motorcycles among the young people in Japan become smaller by years. To overcome this,「Honda Motor」decided to reduce the price of all its motorcycle models and integrated domestic production base.

One of the characteristics of「Honda Motor」is, it tends to procure the necessary parts by their own or related company. In the case of「Toyota Motor」or「Nissan Motor」, they tend to use outsources or subcontractors for their own automobile parts. Besides, this company is wary of the personalization of the company by the founder family, and it actively conduct mid-career recruitment instead of using personal connection. They also have an advantage in overseas expansion, with large volume of sales in Southeast Asia for motorcycles and North America for automobiles. In addition, it got the second largest share of the Chinese market after「Nissan Motors」.

However,「Honda Motor」is relatively weak at autonomous driving technology. And as for the partnership, even though they has a partnership with「General Motors」, but it is not well connected like「Toyota Motor」which is affiliated with「Subaru Corporation」,「Mazda Motor Corporation」,「Suzuki Motor Corporation」or「Nissan Motor」 which is affiliated with「Mitsubishi Motors」,「Renault」. In past,「Honda Motor」was considered as a strongest rival to「Toyota Motor」, with the legendary success in motorcycle business. But nowadays, they are no longer matched with 「Toyota Motor」due to the lacks in innovative technology for four-wheelers. However, 「Honda Motor」is conducting research and development in new business field. For example, they are engaged in the bipedal robots such as "ASIMO" and various robot-related equipment, and is developing a jet machine called "HondaJet" and mega solar photovoltaic power generation.

 

 

 

3. Major Business

 

■ Automobile business
Their automobile products such as RVs, SUVs, minivans, and wagons has good reputation in convenience, steering stability and drivability. Especially, their motorcycle business has a global-level brand power. However, they do not produce taxis or police cars,trucks or buses.

■ General-purpose products
They utilize our own general-purpose gasoline engine to produce cultivators, lawn mowers, snow blowers, generators, outboard motors, solar cells, etc. In particular, they have a top share in the world for lawnmowers and a top share in Japan for generators and snow blowers.

■ Aircraft
It's been a relatively recent business. In 2006, they started to work on the ultra-light jet business, including the release of "HondaJet". From this point onward, the company's aircraft-related department was made independent as the「Honda Aircraft Company」and its development base moved to the United States.

 

 

 

4. Financial information

 

※Unit is JPY million

		2016	2017	2018
Consolidated sales		13,999,200	15,361,146	15,888,617
Consolidated operating profit		840,711	833,558	726,370
Consolidated total assets		18,958,123	19,349,164	20,419,122
Consolidated net assets		7,569,626	8,234,095	8,565,790
Breakdown of sales	Japan	2,114,833	2,240,033	2,394,584
	America	7,621,550	8,067,455	8,526,733
	Europe	638,436	680,497	652,335
	Asia	2,893,404	3,541,680	3,557,338
	Others	730,977	831,481	757,627