Honda Update CR-Z Concept 1

Transcription

1 Honda Update 29 CR-Z Concept 1

2 Honda Direction and Key Challenges 1. Strengthening Advanced Environmental Technologies 2. Advancement of Motorcycle Business 3. Advancement of Automobile Business 2

3 Strengthening Advanced Environmental Technologies Hybrid models: Honda recognizes hybrid technologies as the most realistic path for CO2 reduction at this time INSIGHT Early 29 Launched in U.S., Japan and Europe Excellent Fuel Economy mpg Less CO g/k Affordable Price ---- $19,8~ Integrated Motor Assist (IMA) system CVT path of drive force Motor Engine a lightweight and compact 1.3-liter engine with a motor path of an electronic force Inverter Battery 5, units Annual global sales target (beyond 21) Insight Civic Hybrid 2nd Generation CR-Z FIT/Jazz Hybrid 3rd Generation 3

4 Strengthening Advanced Environmental Technologies Enhancement of hybrid vehicle lineup - Establishment of Blue Energy Co., Ltd., joint venture with GS Yuasa for lithium-ion batteries for hybrid vehicles - Development of hybrid system for with medium to large-size vehicles Blue Energy Osadano Plant in Kyoto, Japan Production start in Fall 21 4

5 Strengthening Advanced Environmental Technologies Applying PGM-FI (fuel injection) system to all models in Thailand by the end of 29 Redesigned Wave 11 series with PGM-FI is a new Asian core-platform model; 18% performance improvement Improved fuel efficiency; 18% mileage improvement Significant reduction in cost and development time Honda to develop and market Electric Motorcycle around 21 Targeting Zero CO2 next generation transportation Launching in 2 years time 5

6 Honda Direction and Key Challenges 1. Strengthening Advanced Environmental Technologies 2. Advancement of Motorcycle Business 3. Advancement of Automobile Business 6

7 Advancement of Motorcycle Business Maintaining strong position particularly in markets with high potential ( Million Units ) CY28 Unit Sales % 3.2 GDP per capita (U.S.$) (JETRO 27) Subsidiary Other % Joint Venture Market Penetration 3 66% Honda s Market Penetration India Indonesia Vietnam Thailand Brazil Penetration Rate (per capita) of Motorcycles ,1 1,2 (millions) $941 India 4.6% 1 unit for 21.7 people $6,938 Brazil 5.9% 1 unit for 16.9 people $1,925 Indonesia 14.8% 1 unit for 6.8 people $828 Vietnam 23.6% 1 unit for 4.2 people $3,732 $16,697 Thailand Taiwan 25.3% 4 1 unit for 4. people 1 unit for 1.7 people 5 69% % 7 77% 1% 75% 5% 25% % Source: Honda Population (millions) Units in operation (millions) *As of 27 *Indonesia as of 26 *India as 25 7

8 Advancement of Motorcycle Business Unit (millions) Growth centered in Asia and South America Honda Motorcycle Sales Growth (23 to 28) Europe Japan North America 1.7 South America 1.5 China Asia

9 Advancement of Motorcycle Business Super Cub series, a big hit for 5 years, continues as a Honda strength Not a performance bike, but meets everyday customer needs Global Production of Cub Series has reached 6 Million Units Honda Cub Series sells more than 3 million units a year worldwide Cub Series achieves high profitability with production efficiency and strong brand image Wave11 (Thailand) Revo (Indonesia) Super Cub (Japan) Biz (Brazil) Unit (millions) 15 Honda Motorcycle Production Unit of cub series produced in 28 Total unit produced Ratio of cub series 5% 4% 1 3% 5 2% 1% FY % 9

10 Honda Direction and Key Challenges 1. Strengthening Advanced Environmental Technologies 2. Advancement of Motorcycle Business 3. Advancement of Automobile Business 1

11 Advancement of Automobile Business Growth of global models makes Honda competitive and efficient Unit: thousands - Unit Sales of Honda s Global 4 Models +1(Hybrid Models) 4, 3,5 - Growth of Hybrid Models 3, 2,5 Others 5, units 2, 1,5 1, 5 58% Fit/Jazz/City CR-V Civic Accord 76% Insight Annual global sales target (beyond 21) Source: Honda Fit/Jazz Civic CR-V Accord 11

12 Advancement of Automobile Business Global Common Design and Global Purchasing Network - Current Fit model demonstrated that sourcing from Asia contributed to significant cost reduction - Current Fit attained cost reduction compared to previous model (Including City) 27K Previous 22K 16K As volume grows, Thai and China J/V ship more cost competitive FIT / City components to Japan Current FIT Current City 12

13 Advancement of Automobile Business Flexible model allocation to optimize capacity utilization Location Annual Capacity Passenger cars Light Trucks Small Middle Luxury Crossover Pickup Van Canada Ontario Alliston Line Line Civic Civic CSX MD-X ZD-X Ridgeline Marysville 44 Accord TL RDX Ohio East Liberty 24 Civic CR-V Element U.S. Indiana Greensburg 1 Civic Mid 29 Alabama Lincoln Line 1 15 Line 2 15 Accord Sedan V6 Pilot Ridgeline Odyssey Odyssey Mexico El El Salto 5 CR-V Import from Japan Civic Accord CR-V 13

14 Advancement of Automobile Business Mature flexible production system to enable Honda to get through anticipated future changes with minimal impact - Production of the Stream was transferred from Suzuka Factory to Saitama Factory in January 29 - Production of the U.S. and Canada version of the Honda Fit started in Saitama Factory from May 29 in addition to Suzuka Factory FIT(US model) Saitama Suzuka STREAM 14

15 Advancement of Automobile Business Reallocation of CAPEX and R&D expenses - In order to minimize the impact of recent changes in the business environment and to focus company resources on necessary areas, All investments and development projects were reviewed. Yorii Assembly Plant 212~ - Revision of CAPEX for expansion Yorii Assembly plant Sakura R&D Center Yachiyo Industry new mini-vehicle plant Sakura R&D Center 21~ 69% Yachiyo Industry New Mini-vehicle Plant 211~ 5% Capital Expenditures & Depreciation 5% Capital Expenditures Depreciation - Revision of R&D activities and expenses Withdrawal of Acura brand launch for Japan market Discontinue NSX successor model with V1 engine Withdrawal from F1 and focus on environmental technologies FY7 FY8 FY9 FY1(P) 15

16 In market deterioration due to the financial crisis, our goal is for business to be in the black in FY1 based on cost structure reforms - Total Amount of Cost Structure Reform Approx. 25B yen Operating Income bn. yen ( %) Yen (billions) FY9 Currency Effect Cost Structure Reform -Effects of cost reductions, etc Cost Structure Reform - Targeting business in the black FY1 Operating income B yen Decrease Decrease in R&D Operating income 1. Cost Structure Reform -Reducing sales incentive, etc +5B yen Revenue, model mix, etc Cost Reduction, etc in SG&A Cost Structure Reform -Decrease in quality related expenses -Withdrawal from some racing activities -Revision of expenses, etc +125B yen 16

17 Industry and Major Market Outlook 1. Honda global business environment 2. North America 3. Japan 4. Europe 5. Asia 6. Other Regions 17

18 Honda Global Business Environment Europe Lack of consumer confidence Auto sales down by 12% in Western Europe in April Russia auto sales down by 54% in April Auto sales increased 2% in Germany due to scrap incentives in April Scrap incentives will start in U.K. from May Honda UK plant shut down from Feb to May Honda motorcycle sales up by 3% in April in India U.S. unemployment rate remain high % in April Monetary measures TALF Gas price stable around $2 April SAAR 9.3M Tax cut program for Eco-vehicle started from April Auto sales down by 23% in April FY1 auto demand forecast 4.3mill (JAMA) Honda Insight No.1 sales in April in Japan (registered car segment) Auto sales increase approx. 3% in China Japan 29 auto demand forecast over 1mill units Motorcycle sales in April down 3% in Indonesia. North America Chrysler began Chapter 11 bankrupcy procedures Used vehicle prices recover since end of 28 Honda announced voluntary separation opportunity in America South America IPI tax cut extended until June Asia Brazil auto sales down by 6% in April Interest rate cut down 7.25% in Indonesia Brazil motorcycle sales down by 16% in April Palm oil price raise in Indonesia for 5month Preferential vehicle purchase tax cut (below 1.6L) from 1% to 5% in China

19 Operations in North America 4Q operating income in North America down due to sluggish sales in U.S., increase in fixed cost and higher yen Yen (billions) 15 16% 1 7.8% 6.7% 7.3% 7.7% 6.1% 7.5% 9.5% 6.3% 5.7% 12% 8% 5 4.3% 1.6% 4% % -5-4% -8% -1-12% % FY7 1Q 2Q 3Q 4Q FY8 1Q 2Q 3Q 4Q FY9 1Q 2Q 3Q 4Q -16% 19

20 Unit (thousands) 2, 15, 16,831 Passenger Cars Light Trucks Industry Demand 16,652 16,884 16,556 Operations in North America Major Markets Honda Automobile Business in U.S. 16,148 Retail Sales 13,3 Unit (thousands) 2, 1,5 1,349 Honda Unit Sales (aggregate numbers of Honda brand and Acura brand) Passenger Cars Light Trucks 1,462 1,394 1,59 1,551 Retail Sales 1,428 1, ( 1,5 ) 1, 5, 5 CY (E) CY (P) Source: Honda Source: Honda Strategy in N.A Market Production capacity & flexible lines New Indiana plant, New Canadian Engine plant started production Accord V6 will be produced in Alabama plant Acura TSX (May 28) Pilot (May 28) Fit (Aug 28) FCX Clarity (Jul 28) Innovative technologies to achieve CAFE Leadership Acura TL (Sep 28) Insight (Mar 29) Acura ZDX (Fall 29) 2

21 Operations in Japan 4Q operating income in Japan down by higher yen and decrease in revenue and model mix change, etc Yen 1 (billions) 12% 5 4.4% 5.9% 3.4% 5.4% 5.2% 6.% 4.5% 3.3% 3.4% 6% % % -5-6.% % -1-12% % % FY7 1Q 2Q 3Q 4Q FY8 1Q 2Q 3Q 4Q FY9 1Q 2Q 3Q 4Q -24% 21

22 Unit (thousands) 6, Registered vehicle Mini 5,829 5,855 5,854 Industry Demand 5,739 5,354 Operations in Japan Mature Markets - Honda Automobile Business in Japan Retail Sales 5, Unit (thousands) Honda Unit Sales Retail Sales 58 Others (572) 4, 2, Minivan Small Mini ** CY (E) Source: Honda **Apr.9-Mar.1 Strategy in Japan Market Enhancing product line up with efficiency - Strengthen Hybrid model - Cost reduction by using global purchasing network Enhancing sales network - Enhancing sales and marketing function for hybrid vehicles - Improving stability of consolidated sales subsidiaries FY (P) Source: Honda FREED (May 28) Odyssey (Oct 28) Life (Nov 28) FCX Clarity (Nov 28) Accord (Dec 28) Insight (Feb 29) 22

23 Operations in Europe 4Q operating income in Europe (including Russia) down, due to sluggish sales in Western Europe Yen (billions) 1% % 4.2% 5% 2.9% 3.1% 2.4% 5 2.% % 2.6% 1.4% % % % FY7 1Q 2Q 3Q 4Q FY8 1Q 2Q 3Q 4Q FY9 1Q 2Q 3Q 4Q -4.% -5% 23

24 Unit (thousands) 15, 1, Mature Markets - Honda Automobile Business in Western Europe Industry Demand Honda Unit Sales (EU15+EFTA) Unit (excluding commercial vehicles) (EU15+EFTA) (thousands) Petrol Diesel Operations in Europe Retail Sales 13, Retail Sales 232 Others Jazz 15 CR-V 5, 1 Accord 5 Civic CY (E) Source: Global Insight CY (P) Source: Honda Strategy in Western Europe Market Environmental strategy Low CO2 emission models; Insight 11g/km, Jazz 125g/km Flexible Production Lines and Production Allocation Jazz production starts at UK plant within 29 Accord (Jun 28) Jazz (Oct 28) Insight (Mar 29) 24

25 Operations in Asia Operating income in Asia exceeded 1 billion in FY9 with auto and motorcycle growth Yen (billions) 5 15% % 13% 3 9.4% 8.% 9.3% 8.4% 11% 9% 2 6.8% 5.8% 6.7% 5.2% 5.3% 6.5% 7% 5% 1 3% % -1% -1 FY7 1Q 2Q 3Q 4Q FY8 1Q 2Q 3Q 4Q FY9 1Q 2Q 3Q 4Q -1.9% -3% 25

26 Operations in Asia Industry Demand in Major Asian Motorcycle Markets 25, Industry: Unit ( thousands ) Wholesale 2, India Indonesia Thailand Vietnam (18.3mil) (2.7mil) 15, (1.8mil) (2.4mil) (2.9mil) (1.7mil) (1.4mil) (2.1mil) (1.9mil) (1.6mil) 1, (1.3mil) (1.8mil) (2.8mil) (2.mil) (3.9mil) (5.1mil) (4.6mil) (4.9mil) (6.5mil) 5, (5.4mil) (6.mil) (6.8mil) (7.8mil) (7.4mil) (7.4mil) CY (E) Source: Honda 26

27 Operations in Asia Industry: Unit (thousands) 1, 8, In India, motorcycle business foundation solidified behind two companies, Hero Honda and HMSI Other brands Hero Honda Honda Motorcycle & Scooter India Wholesale 6, 4, 2, (3,516) CY (E) Principal models of Principal models of Hero Honda Motors Limited Honda Motorcycle & Scooter India (979) Source : Honda Splendor NXG Super Splendor Passion+ Debut in May. 7 Debut in May. 7 Debut in May. 7 Activa CBF Stunner FMC Apr. 9 Debut in June. 8 27

28 Operations in Asia Industry: Unit (thousands) 1,4 Steady Growth of Honda Motorcycle & Scooter India (HMSI), a subsidiary of Honda in India Wholesale 1,2 1, (979) CY (E) Principal models of HMSI Source : Honda Activa FMC Apr. 9 Aviator Debut in Feb. 8 CBF Stunner Debut in June. 8 28

29 Industry: Unit (thousands) 6, Other brands Honda Operations in Asia Continuously introducing innovative products to the Indonesian motorcycle market Wholesale 5, 4, 3, 2, (2,875) 1, Added annual production capacity in Sep. 25 (2, 3, thousand units) CY (E) Principal models Source: Honda CS1 125cc Debut Apr. 8 BeAT 11cc AT Model Debut Jun. 8 Blade 11cc Debut Dec.8 Revo 11cc FMC Jan.9 29

30 Operations in Asia Industry: Unit (thousands) 3,5 3, 2,5 2, 1,5 Other brands Honda Honda to enhance product pipeline for Vietnamese motorcycle market Wholesale 1, (1,247) 5 CY (E) Principal models Source: Honda Click 11cc AT Model Debut Oct. 6 Future Neo FI 125cc Fuel Injection Debut Apr 7 Air Blade 11cc AT Model Debut Apr 7 Wave S 1cc Debut May 7 Wave α 1cc MMC Jul 8 3

31 Operations in Asia 2,5 2, Unit (thousands) Malaysia Indonesia Honda Automobile Business in Southeast Asia Industry Demand Thailand Philippines 1,892 Wholesale 25 2 Unit (thousands) Malaysia Indonesia Honda Unit Sales Thailand Philippines 19 Retail Sales 1, , CY (E) CY (P) Source: Honda Source: Honda Strategy in Southeast Asian Market Optimal allocation to enhance production efficiency Production of FREED in Indonesia starting in June 29 Enhance complementary approach in ASEAN region Strengthening of purchase function to flexibly consolidate and re-allocate Jazz (May 28) City (Sep 28) Freed (Jun 29) 31

32 1,5 1, Honda Automobile Business in India Industry Demand Honda Unit Sales (excluding commercial vehicles, SUV and MUV) Unit (thousands) Unit Category (thousands) Premium "A" 8cc ,2 45 Operations in Asia Wholesale Retail Sales 53 CR-V Civic City CY (E) Source: Global Insight Accord CY (P) Source: Honda Strategy in India Market Established 2 nd plant (parts) in Sep 28 to supply body panels and engine components to the 1 st plant to export engine components to Asian countries Introduce Jazz in India in mid 29 to enjoy excise duty benefit for small-sized car City (Nov 28) Jazz (Mid 29) 32

33 Operations in Other Regions Operating income in Other regions in FY9 centers on Brazil to grow Yen (billions) % 14.% 13.8% 15% % 1.9% 8.3% 8.4% 9.6% 11.3% 11.2% 1.4% 1% 2 4.1% 5% FY7 1Q 2Q 3Q 4Q FY8 1Q 2Q 3Q 4Q FY9 1Q 2Q 3Q 4Q % 33

34 Operations in Other Regions Industry: Unit (thousands) Solid operation as a market leader in Brazilian motorcycle market Introducing PFM-FI (Fuel Injection) models to meet Euro3 Wholesale 2, Other brands Honda Source: Honda 1,5 1, Exceed one million units per year (1,459) 5 CY (E) Principal models CG 125 FAN Biz 125 CG 15 Titan CG 15 Titan Mix Flex Fuel Debut Mar 9 34

35 Unit (thousands) 3, Operations in Other Regions Honda Automobile Business in Brazil Industry Demand Honda Unit Sales (including commercial vehicles) 2,377 Retail Sales 2,671 Unit (thousands) Brazil ( Flexible Fuel Vehicle) ( Petrol Engine Vehicle) Confidential Strong sales of FFV models contributed to growth Retail Sales 2, 1, 1,339 1,532 1,618 1, FFV 2 CY (E) (P) Source: Global Insight Source: Honda Strategy in South America Market Environmental strategy (FFV->Brazil) Expansion of production capacity Brazil: Expand capacity to 12, units in Aug 28 Fit FFV (Nov 28) Civic FFV 35

36 Financial Highlights FY 9 4Q Results - Outline - Profit Analysis - Business Segment Information FY 1 Forecasts Dividend per Share 36

37 Outline of FY9 Twelve Months Financial Results (Consolidated) Unit (Sales) Unit (thousands) EPS (Yen) Note : Shares which are based on calculation of EPS approx. 1,815,356, shares (weighted average number of shares outstanding ) FY9 Twelve Months FY8 FY9 Change Motorcycles 9,32 1, % Automobiles 3,925 3, % Power Products 6,57 5, % FY9 Twelve Months Financial results Yen(billions) FY8 FY9 Change Net sales & other operating revenue 12,2.8 1, % Operating income % Income before income taxes % Equity in income of affiliates % Net income % Average Rates (Yen) approx. 1,814,561, shares (weighted average number of shares outstanding ) US Dollar Euro % ( yen) Yen up by 13 yen Yen up by 2 yen Business Environment Crude oil and raw material prices rose significantly worldwide in the first half, then declined in the second half. The economy in the U.S. and Europe deteriorated caused by the financial crisis. A further downturn due to the negative economic cycle is feared. In China and India, economic growth slowed down in the second half. In Japan, both capital expenditures and consumer spending declined, and the economy is rapidly deteriorating Yen appreciation against the U.S. dollar and Euro Motorcycle market Demand in the U.S declined significantly Due to strong sales in the first half, industry-wide sales volume in Brazil, India and Thailand maintained YOY despite reduced sales in the second half Automobile market Demand in the U.S., Western Europe and Japan declined significantly in the second half. Overall market size was increased in Brazil, China and India despite a temporary decline in demand. Major Change Factors Asia and other regions including Brazil contributed to gain in operating profit, offsetting deterioration in major markets. Unit Sales Motorcycles: Favorable sales in Asia and Other Regions, which includes Brazil Decreases in North America, Japan and Europe Automobiles: Strong sales in Asia and Brazil Decreases in North America, Japan and Europe Power Products: Increases in Asia and Other Region, which includes Middle East Decreases in North America, Europe and Japan Net sales & other operating revenue Decline due to lower sales volume of automobiles and power products Negative currency translation effects Operating income <Increase Factors> Effects of cost reduction Decrease in R&D <Decrease Factors> Decrease in revenue and model mix change, etc. Increased raw material costs Increased fixed cost due to production cut Currency factors 37

38 895.8 Change in Income before Income Taxes < FY9 Twelve Months > Revenue, model mix, etc. Income before Income taxes bn. yen (- 81.9%) Operating Income bn. yen ( -8.1% ) <Increase Factors> Effects of cost reductions, etc. <Decease Factors> Impact of increase in raw material prices Increase in fixed cost due to production cut, etc Cost Reduction, the effect of raw material cost, etc Increase in SG&A Decrease in R&D Other Income & Expenses bn. yen <Increase Factors> Decrease in quality related expenses, etc. <Decease Factors> ne-off expenses related to withdrawal from some racing activities and cancellations of new model developments Increase in provisions for credit loss and residual loss, etc. Currency effect due to difference between average rates and transaction rates: +33. bn. yen Interest rate swap cost, etc. : bn.yen Yen (billions) Operating income FY8 12 Months <Increase Factors> Change in pricing for the new model year Decrease in sales incentives for North America automobile business <Decease Factors> Decline in profit attributable to lower unit sales Model mix impact, etc. Currency Effect (Exhibit 2) Others Fair value of derivative instruments Operating income FY9 12 Months <Currency Effects > Impact on Operating income bn. yen (due to difference of average rates and translation effects) Impact on Other income & expenses bn. yen (due to difference between average rates and transaction rates) Impact on Income before income taxes bn. yen (see also Exhibit 1) 38

39 Outline of FY9 4th Quarter Financial Results (Consolidated) 4Q Results Unit (Sales) Unit (thousands) FY8 FY9 Change Motorcycles 2,368 2,2-15.5% Automobiles 1, % Power Products 2,92 1, % 4Q Results Financial results Yen(billions) FY8 FY9 Change Net sales & other operating revenue 3,55.5 1, % Operating income Income before income taxes Equity in income of affiliates % Net income Business Environment Financial crisis and deterioration of real economy led the U.S. and Europe recession to deepen and become more serious. Japan economy deteriorated rapidly due mainly to a decline in exports. Pace of economic expansion has further slowed down in Asia Yen appreciation against the U.S. dollar and Euro Motorcycle market Steep deterioration not only in the U.S. but in Thailand and Indonesia Demand in India has recovered from the previous quarter. Automobile market Steep downturn in the U.S., Japan and Western Europe Demand in Russia continued to decline largely. Expanding markets in India, Brazil and China Major Change Factors Honda earned operating profit for the fiscal year, however it posted operating loss in the 4Q due to decreased volume in all businesses under rapid market deterioration. Unit Sales Motorcycles: Automobiles: Power Products: Decreased unit sales in all the regions Decreased unit sales in all the regions Decreased unit sales in all the regions EPS (Yen) Note : Shares which are based on calculation of EPS Average Rates (Yen) approx. 1,814,587, shares (weighted average number of shares outstanding ) approx. 1,814,61, shares (weighted average number of shares outstanding ) US Dollar Euro ( yen) Yen up by 12 yen Yen up by 37 yen Net sales & other operating revenue Decline mainly due to decreased unit sales of automobiles Negative currency translation effects Operating income <Increase Factors> Effects of cost reduction Decrease in SG & A <Decrease Factors> Decrease in revenue and model mix change, etc. Increased fixed costs due to production cut Increased raw material costs Currency factors 39

40 Change in Income before Income Taxes <FY9 4th Quarter> Income before Income taxes bn. yen Yen (billions) Operating Income bn. yen <Increase Factors> Change in pricing for the new model year, etc. Other Income & Expenses bn. yen <Decease Factors> Decline in profit attributable to lower unit sales Model mix impact, etc. Operating income FY8 4Q <Increase Factors> Decrease in quality related expenses Decreased expenses for advertising, sales promotion, etc. <Decease Factors> ne-off expenses related to withdrawal from some racing activities and cancellations of new model developments, etc. FY9 4Q Revenue, model mix, etc Currency effect due to difference between average rates and transaction rates: bn. yen Interest rate swap cost, etc. : bn.yen Operating income Cost Reduction, the effect of raw material cost, etc. Decrease in SG&A Decrease in R&D Currency Effect Fair value of derivative instruments (Exhibit 2) Others <Increase Factors> Effects of cost reductions, etc. <Decease Factors> Increase in fixed cost due to production cut Impact of increase in raw material prices, etc. <Currency Effects > Impact on Operating income bn. yen (due to difference of average rates and translation effects) Impact on Other income & expenses bn. yen (due to difference between average rates and transaction rates) Impact on Income before income taxes bn. yen (see also Exhibit 1) 4

41 Unit (thousands) 16, 14, Motorcycle Unit Sales (Motorcycles + All-Terrain Vehicles, etc.) FY9 4Q Change from FY 8 4Q Major increase/decrease factors Japan Increase of leisure model such as Monkey - Decrease in sales of scooters such as TODAY and FORZA North America Europe Decrease of sports bikes such as CBR1RR and custom bikes such as VTX13C - Increase of scooters such as SH15 in Italy - Decrease of scooters such as SH125 in Spain Monkey (Japan) ( + 8.5% ) 12, 1, 8, 6, 4, 2, 2, Asia 1, Other Regions 1, Total 2,2-366 Approx 1,1 Approx 1,2 1Q 2, , Q FY8 Approx 1,16 Approx 1,28 2, , Q 2, ,617 4Q - Increase of Unicorn Shine in India - Decrease of Wave CLICK in Thailand - Increase of CG125 in Brazil - Decrease of CG15 TITAN, BIZ125 in Brazil Approx 1,21 2, ,5 1Q -366 ( -15.5% ) Approx 1,26 2, ,146 * Unit sales is the total of sales of completed products of Honda and its consolidated subsidiaries and sales of parts for Honda s affiliates accounted for under the equity method. 2Q FY9 Approx 1,11 2, ,878 3Q , ,449 4Q Unicorn (India) Approx 1,1 Unit sales of Honda-brand motorcycle products that are manufactured and sold by overseas affiliates accounted for under the equity method, but do not use any parts supplied by Honda and its subsidiaries Other Regions Asia 71 Europe 72 North America 51 Japan Approx 4,58 9,32 1,61 6, Months FY Approx 4,7 1,114 1,763 7, Months FY

42 Motorcycle Business Net Sales/Operating Income/Operating Margin Net Sales 1Q FY8 2Q 3Q Q Q 393. FY9 2Q 3Q Q FY8 12 Months 1,558.6 FY9 12 Months 1,411.5 Yen (billions) (- 38.2%) (- 9.4%) Yen (billions) 16 Operating Margin Operating Income <Increase Factors> Effects of cost reduction, etc. <Decrease Factors> Increase in raw material costs, Decrease in revenue and model mix change, etc. 16% % % % % % % % % ( - 34.% ) 7.1% % 12% 1% 8% 6% 4% 2% -2-1.% % -2% 1Q 2Q FY8 3Q 4Q 1Q 2Q FY9 3Q 4Q 12 Months FY8 12 Months FY9 42

43 Automobile Unit Sales Unit (thousands) 4,5 FY9 4Q Change from FY 8 4Q Japan Major increase/decrease factors - Increase of FREED, INSIGHT, etc. - Decrease of FIT, etc. -48 ( -1.4% ) 4, 3,5 3, North America Europe 13-6 Asia Other Regions Total Increase of FIT, etc. - Decrease of Accord, Civic, CR-V, etc. - Increase of Civic and CR-V in Russia - Decrease of CR-V and Civic in the U.K., Spain and Italy - Decrease of component parts for China (Accord and CR-V, etc.) - Decrease of CR-V, in Indonesia, etc. - Increase of CR-V in Brazil - Decrease of Civic, CR-V in Australia INSIGHT (Japan) CR-V (Brazil) 3, , , , ( % ) 35 1,5 1, Q Q FY Q 1, Q Q * Unit sales is the total of sales of completed products of Honda and its consolidated subsidiaries and sales of parts for Honda s affiliates accounted for under the equity method Q FY Q Q Other Regions Asia Europe North America Japan 1, Months FY8 1, Months FY9 43

44 Automobile Business Net Sales/Operating Income/Operating Margin Net Sales 1Q 2,327.2 FY8 2Q 3Q 2, ,449. 4Q 2, Q 2,228. FY9 2Q 3Q 2,17.6 1, Q 1,31.4 FY8 12 Months 9,489.3 FY9 12 Months 7,674.4 Yen (billions) (- 44.8%) (- 19.1%) Yen (billions) Operating Margin Operating Income <Increase Factors> Effects of cost reductions, Decrease in SG&A expenses etc. <Decrease Factors> Decrease in revenue and model mix change, etc. Increase in fixed cost due to production cut Increase in raw material costs etc % 45% 4% 4 (- 96.3%) 35% 3% % % 9.% % % % 3.6% 7.% % 25% 2% 15% 1% 5% % -5% -1% % -15% -2% % 1Q 2Q FY8 3Q 4Q 1Q 2Q FY9 3Q 4Q 12 Months FY8 12 Months FY9 44

45 Power Products Unit Sales Unit (thousands) 7, 6, 5, FY9 4Q Change from FY 8 4Q Japan 11-5 North America Major increase/decrease factors - Increase of gas-powered mini-tiller Pianta FV2, etc - Decrease of GX series engines for OEM generators - Decrease of GC/GC(V) series for OEM washer pressure and lawn mower in United States Europe Decrease of general purpose engines, such as -199 GX/GC series engines for OEM construction machinery and generators Asia Increase of water pumps in Indonesia Other Regions Total 1, Decrease of generators in India - Decrease in general purpose engines, such as the GX series generators in Australia Pianta FV2 (Japan) 6, (- 14.4%) 5, , (- 26.8%) 1, , 1,36 2,92 2, 1, 1, Q 1, Q FY8 1, Q Q 1, Q 1,22 * Unit sales is the total of sales of completed products of Honda and its consolidated subsidiaries and sales of parts for Honda s affiliates accounted for under the equity method Q FY9 1, Q 1, Q Other Regions Asia Europe North America Japan 2, Months FY8 1, Months FY9 45

46 Power Product & Other Businesses Net Sales/Operating Income/Operating Margin Net Sales 1Q FY8 2Q 3Q Q Q Q 13. FY9 3Q Q 79.4 FY8 12 Months FY9 12 Months Yen (billions) Operating Margin (- 35.1%) (- 16.7%) Yen (billions) 25 2 Operating Income <Increase Factors> Decrease in SG&A expenses <Decrease Factors> Decrease in revenue and model mix change, etc. Increase in R&D expenses for Other Businesses (expenses related to start-up of new businesses), etc. 2% 16% % % 6.6% % 4.2% %.2 -.9% % % 5.% - 4.2% % 4% % -4% -8% -12% -2 1Q 2Q FY8 3Q 4Q 1Q 2Q FY9 3Q 4Q 12 Months FY8 12 Months FY9-16% 46

47 Financial Services Business Net Sales/Operating Income/Operating Margin Net Sales 1Q FY8 2Q 3Q Q Q FY9 2Q 3Q Q FY8 12 Months 549. FY9 12 Months Yen (billions) Operating Margin (- 2.4%) (+ 8.6%) Operating Income Yen (billions) 13 <Increase Factors> Increase in finance receivables and property on operating leases, etc. <Decrease Factors> Increase in provisions for residual loss, etc % (- 42.3%) (- 31.5%) 3% % 22.1% 21.5% % 19.2% 14.9% 13.1% % 2% Q Q FY Q Q Q Q FY9 6.5% 9.4 3Q 18. 4Q 12 Months FY Months FY9 1% % 47

48 FY1 Financial Forecasts (Consolidated) Yen (billions) FY9 Results FY1 Forecasts Change Amount % Net sales & other operating revenue 1,11.2 8, , % Operating income % Income before income taxes % Equity in income of affiliates % Net income % EPS (Yen) % Note : Shares which are based on calculation of EPS Approx. 1,814,561, shares (weighted average number of shares outstanding ) Approx. 1,814,69, shares (as of Mar. 31, 29) Net income FY1 means attributable to shareholders of Honda Average Rates (Yen) U.S. Dollar Yen up by 6 yen Euro Yen up by 17 yen 48

49 Unit (thousands) Motorcycles -1,519 Forecast: Unit Sales by Business Segment Unit sales of Honda-brand motorcycle products that are manufactured and sold by overseas affiliates accounted for under the equity method, but do not use any parts supplied by Honda and its subsidiaries Automobiles Power Products , 12, 9, 6, Approx 4,7 1,114 1,763 4, Approx 5,38 8,595 1,465 3, 2, 3, , , 5, 4, 3, 5, ,36 4, ,23 Other Regions Asia Europe 3, 7,523 6,5 1, 1,496 1,35 2, 1, 1,893 1,69 North America FY9 Results FY1 Forecasts 556 FY9 Results FY1 Forecasts FY9 Results FY1 Forecasts * Unit sales is the total of sales of completed products of Honda and its consolidated subsidiaries and sales of parts for Honda s affiliates accounted for under the equity method Japan 49

50 Forecast: Change in Income before Income Taxes Yen Income before income taxes bn. yen ( %) (billions) Operating Income bn. yen ( %) Other Income & Expenses bn. yen Decrease in R&D Operating income Currency Effect Fair value of derivative instruments Others Operating income 1. FY9 Results -39. FY1 Forecasts Revenue, model mix, etc. Cost Reduction, etc. Decrease in SG&A 5

51 Forecast: Capital Expenditures, Depreciation, R&D Expenses Yen (billion) FY9 Results FY1 Forecasts Change Capital expenditures * Depreciation and amortization * R&D expenses * Capital expenditures in results and the forecast aforementioned exclude investment in operating leases and acquisition of intangible assets. * Depreciation and amortization in results and the forecast aforementioned exclude depreciation of investment in operating leases and amortization of intangible assets. U.S. Dollar Yen up by 6 yen Euro Yen up by 17 yen 51

52 Dividend to Shareholders (Yen) Dividend per share FY8 Results FY9 Results & Projection Increase/Decrease from FY8 Results FY1 Projection Increase/Decrease from FY9 Results 1 st quarter End * - 14 * 2 nd quarter End ± 8 * - 14 * 3 rd quarter End * -3 * 4 th quarter End 22 8 * - 14 * 8 * ± * Fiscal Year * -23* 32 * -31 * * Projection as of Apr. 28th 52

53 Caution with Respect to Forward-Looking Statements: This slide contains forward-looking statements about the performance of Honda, which are based on management s assumptions and beliefs taking into account information currently available to it. Therefore, please be advised that Honda s actual results could differ materially from those described in these forward-looking statements as a result of numerous factors, including general economic conditions in Honda s principal markets and foreign exchange rates between the Japanese yen and the U.S. dollar, the Euro and other major currencies, as well as other factors detailed from time to time. Accounting standards: Our consolidated financial standards are prepared in conformity with U.S. generally accepted accounting principles. Notice on the Factors for Increases and Decreases in Income: With respect to the discussion above of the change in operating income, management has identified the factors set forth below and used what it believes to be a reasonable method to analyze the respective changes in such factors. Each of these factors is explained below. Management has analyzed changes in these factors at the levels of the Company and its material consolidated subsidiaries. (1) Foreign currency effects consist of translation adjustments, which come from the translation of the currency of foreign subsidiaries financial statements into Japanese Yen, and foreign currency adjustments, which result from foreign-currency-denominated sales, which, at the levels of the Company and those consolidated subsidiaries which have been analyzed, primarily relate to the following currencies: U.S. dollar, Canada dollar, Euro, GBP, BRL and Japanese Yen. (2) With respect to cost reduction and effects of raw material cost fluctuations, management has analyzed cost reduction and effects of raw material cost fluctuations at the levels of the Company and its material foreign manufacturing subsidiaries in North America, Europe and other regions. (3) With respect to changes in net sales and model mix, management has analyzed changes in sales volume and in the mix of product models sold in major markets which have resulted in increases/decreases in profit, as well as certain other reasons for increases/decreases in net sales and cost of sales. (4) With respect to selling, general and administrative expenses, management has analyzed reasons for an increase/decrease in selling, general and administrative expenses from the previous fiscal year net of currency translation effects. 53

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