Honda 2007 Annual Report Download - page 25

23
60
40
20
0
02 03 04 05 06 07
Years ended March 31
CR-V
Civic
City
Accord
Honda’s Unit Sales in India
(Year)
(Thousands
of units)
1,200
1,000
800
600
400
200
001 02 03 04 05 06
Source: Global Insight
8
6
4
2
0
Honda’s share
Total Market in India (Excluding
Commercial Vehicles) (Year)
(%)
(Thousands
of units)
5,000
4,000
3,000
2,000
1,000
001 02 03 04 05 06
8
6
4
2
0
Honda’s share
Source: Global Insight
Overall Market for Passenger
Cars in China (Year)
(Thousands
of units) (%)
300
200
100
0
01 02 03 04 05 06
Others
Civic
CR-V
Fit
City
Odyssey
Accord
Honda’s Unit Sales in China
(Year)
(Thousands
of units)
4. Growing Asian Markets, Centered on China and India
qChina Growing into the World’s Second Largest Automobile
Market
In calendar 2006, the Chinese automobile market, including commercial
vehicles, grew 25.3%, to approximately 7,220,000 units*, following the
United States as the world’s second-largest market. Economic expansion
is enabling a growing segment of society to purchase automobiles, and
the move toward motorization is rippling outward from urban centers into
the countryside, enlarging the market.
However, in December 2006 China’s National Development and Reform
Commission announced policies designed to address a surplus of facilities
of small and medium-sized manufacturers in the country by restructuring
automobile production and encouraging development of their own brands.
Attention continues to focus on the potential impact of this development.
Source: China Association of Automobile Manufacturers
In this climate, Guangzhou Honda Automobile Co., Ltd. (Guangzhou
Honda), and Dongfeng Honda Automobile Co., Ltd. (Dongfeng Honda),
affiliates accounted for under the equity method, posted strong unit sales,
helped by the City and the Civic, which launched in April 2006. As a result,
in fiscal 2007 these two companies delivered combined sales of 323,000
units, up 25.9% from the previous year.
From a production standpoint, to meet growing demand, in February
2006 Dongfeng Honda expanded its capacity to 120,000 vehicles per year
and, in September 2006 Guangzhou Honda began production at its second
plant, which has an annual capacity of 120,000 units. In expanding their
capacity, the two plants introduced leading-edge technologies that take into
consideration the global and production environments.
In addition to raising capacity for finished cars, Honda Auto Parts
Manufacturing Co., Ltd., began operations in March 2007, to provide
the advanced automatic transmissions (AT) that require advanced
manufacturing technology.
To support the provision of products that meet the needs of customers
in China, Guangzhou Honda established a wholly owned R&D subsidiary,
Guangzhou Honda Automobile Research & Development Co., Ltd., in
April 2007.
w The Growing Indian Market
Supported by brisk economic expansion, total automobile demand in India,
excluding commercial vehicles, increased to approximately 1,240,000 units
in calendar 2006, up 18.2% from the preceding year.
Honda’s sales in this market in fiscal 2007, came to 60,000 units, up
40.3%. In addition to the core City model, the Civic, which launched in July
2006, posted favorable sales.
To meet growing demand, at the end of calendar 2007 Honda Ciel Cars
India Limited plans to expand its annual capacity from 50,000 units to
100,000 units, and in May 2007 the company acquired a site with the goal
of building a second plant.