Honda 2007 Annual Report Download - page 58

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Europe
In calendar year 2006, total European motorcycle demand*2
increased from the previous year, to approximately 1,290,000
units, particularly in Spain due to changes in licensing systems
as well as economic expansion, followed by increases in Italy,
France and the United Kingdom.
In fiscal year 2007, unit sales decreased 6.8%, to 329,000
units. Sales were strong for the SH300i, which launched in
December 2006. Sales of PS125i, PS150i and Silver Wing 400
scooters were also stable, as were sales of the Deauville tour-
ing bike model. However, sales of large super sports models
and models mainly in the 125cc class declined.
*2 Motorcycle registrations in Europe (10 countries)
Asia
In Asia, demand for motorcycles as an essential mode of trans-
portation has continued to grow. In fiscal year 2007, unit sales
in Asia of completed products of Honda and its consolidated
subsidiaries, and unit sales of parts to Honda’s affiliates
accounted for under the equity method for purposes of local
production by such affiliates in the aggregate, declined 0.2%,
to 7,895,000 units.
The Honda Group is working hard to expand local busi-
nesses in the region through its active promotion of local pro-
curement of parts used in overseas production. In Asia, this
strategy has resulted in an increase in sales of Honda-brand
motorcycles that are manufactured and sold by affiliates
accounted for under the equity method in India and China,
but do not include any parts supplied by Honda or its consoli-
dated subsidiaries, therefore not included in the consolidated
unit sales.
Total demand in India in calendar 2006 expanded to
approximately 8,390,000 units, buoyed by growing market of
motorcycles which is the largest category. Hero Honda Motors
Limited, an affiliate accounted for under the equity method,
enjoyed strong sales of its mainstay Splendor, Splendor Plus
and Super Splendor models. In December 2006, the Company
launched the new CD Dawn and CD Deluxe models, which
feature class-leading fuel efficiency. Honda Motorcycle and
Scooter India Private Limited, a consolidated subsidiary,
reported strong sales of the Shine equipped with a newly
developed engine and the Activa scooter. In India in fiscal year
2007, total unit sales of completed motorcycles of Honda and
its consolidated subsidiaries, and unit sales of parts to Honda’s
affiliates accounted for under the equity method for purposes
of local production by such affiliates in the aggregate, grew
10.3%, to 2,134,000 units.
In calendar year 2006, the Indonesian market experienced
increasing inflation and interest rates, caused by a sharp rise in
gasoline prices, which substantially dampened consumer pur-
chasing power in the first half of the year. Fortunately, a mid-
year monetary policy relaxation helped ease the inflation rate.
Companies in Indonesia responded by strengthening measures
to expand sales, but total demand fell to approximately
4,630,000 units nevertheless. P.T. Astra Honda Motors, an
affiliate accounted for under the equity method, experienced
strong sales of Vario, an automatic transmission (AT) equipped
scooter launched in September 2006. Sales of Karizma by P.T.
Astra Honda Motors, however, declined. As a result, in fiscal
year 2007 total unit sales of completed motorcycles of Honda
and its consolidated subsidiaries, and unit sales of parts to
Honda’s affiliates accounted for under the equity method for
purposes of local production by such affiliates in the aggre-
gate, fell 7.7%, to 2,467,000 units from the previous fiscal
year.
In Thailand, total demand in calendar year 2006 came to
approximately 2,060,000 units, down from the previous year. A
maturing motorcycle market, the sharp rise in gasoline prices,
political upheaval and irregular weather all had some impact
on these results. Unit sales in fiscal year 2007 fell 7.5%, to
1,401,000 units from the previous year, although two AT-
equipped scooters—the Click, which launched in fiscal year
2006, and the Air Blade, which went on sale in June 2006—
were favorable.
Total demand for motorcycles in Vietnam in calendar year
2006 benefited greatly from the country’s thorough abolition of
a regulation limiting riders to one per motorcycle. This move
caused the market to expand and pushed up demand to
approximately 2,370,000 units. Similarly, in fiscal year 2007,
unit sales significantly increased 25.3%, to 787,000 units.
China’s 2005 implementation of Euro2 emission standards
caused motorcycle demand to plunge, but in calendar year
2006, this demand returned to 2004 level, expanding to
approximately 14,830,000 units. Sundiro Honda Motorcycle
Co., Ltd., an affiliate accounted for under the equity method,
experienced strong sales of the M-Power, which launched in
June 2006. Sales of the Fight Hawk, featuring a large half
cowl, were also strong. Similarly, another affiliate accounted for
under the equity method, Wuyang-Honda Motors (Guangzhou)
Co., Ltd., introduced the SCR110—the first model in China to
be equipped with programmed fuel injection (PGM-FI)—in
September 2006. In February 2007, the company also
launched the SCR125 sports bike. Both models enjoyed favor-
able sales. As parts for manufacturing these new models are
not supplied by Honda or its consolidated subsidiaries, their
numbers are not included in Honda’s consolidated unit sales.
For this reason, together with the decrease in unit sales of
other models, total unit sales of completed motorcycles of
Honda and its consolidated subsidiaries, and unit sales of
parts to Honda’s affiliates accounted for under the equity
method for purposes of local production by such affiliates in
the aggregate, fell 39.3%, to 204,000 units.
To meet increasing demand in the region, two new plants
began operations—one in the Philippines in May 2006, and
the other in July in Pakistan.
Other Regions
Other regions—including Latin America, the Middle & Near
East, Africa and Oceania—unit sales grew 26.9%, to
1,305,000 units from the previous fiscal year. In Brazil, where
economic performance was stable, Honda posted solid sales
of such models as the Biz 125 and the CG125 Fan.
In June 2006, we began local production in Argentina to
meet rising demand.
Automobile Business
Honda’s unit sales of automobiles amounted to 3,652,000
units, up 7.7% from the previous fiscal year. In Japan, unit