Honda 2007 Annual Report Download - page 18

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16
1,500
1,000
500
0
100
80
60
40
20
0
01 02 03 04 05 06
(Thousands of units) (%)
Other companies
Honda
Honda’s share
Source: Abraciclo
Overall Brazilian Market and
Honda’s Market Share (Year)
(Reference) Units sold on a wholesale basis
Since beginning local production in Brazil in 1976, we have raised local procure-
ment rates and bolstered cost competitiveness, and in the process developed a
solid operation with deep local roots. As a result of many years of effort, Honda
currently holds approximately 80% share of the Brazilian market.
The Manaus plant, which is scheduled to expand
annual production to 1.5 million units by the end
of calendar 2007
Manufacturing line of the CG150 TITAN, which is
a principal model
1,200
1,000
800
600
400
200
0
(Thousands of units)
76 86 96 06
Units Manufactured by Honda in Brazil
Convergent inflation
Era of hyperinflation
Demand and production expansion
Initiative to increase local procurement ratio → Strong countermeasure to exchange rate fluctuations
Source: Honda
Structural reform of exchange
and financial policies
Honda
Sources of Honda’s Strong Position in the Brazilian Market
POP100
An easy-to-handle, reasonably
priced family motorcycle
Model Introduced in
Fiscal 2008
Motorcycle Business
3. Robust Economic Growth Spurs Ongoing Expansion
of Brazilian Market
In 2006, the size of the Brazilian market expanded 24.0% year-on-year, to
approximately 1,270,000 units, with currency exchange and inflation rates
stable in a robust economic climate. Honda’s unit sales in fiscal 2007
increased 22.0% from the previous term, to 1,021,000 units, despite
competition from expanding local production by a Chinese manufacturer.
The country’s economic outlook remains stable for calendar 2007, and
motorcycle demand is expected to continue expanding and rise more than
20%, to 1,550,000 units. To meet this increasing demand, in January 2007
we raised annual production capacity from 1,000,000 units to 1,350,000
units. By the end of calendar 2007, we intend to further increase annual
capacity, to 1,500,000 units.