Honda 2007 Annual Report Download - page 7
Download and view the complete annual report
Please find page 7 of the 2007 Honda annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.-
1 -
2 -
3 -
4 -
5 -
6 -
7 -
8 -
9 -
10 -
11 -
12 -
13 -
14 -
15 -
16 -
17 -
18 -
19
-
20
-
21
-
22
-
23
-
24
-
25
-
26
-
27
-
28
-
29
-
30
-
31
-
32
-
33
-
34
-
35
-
36
-
37
-
38
-
39
-
40
-
41
-
42
-
43
-
44
-
45
-
46
-
47
-
48
-
49
-
50
-
51
-
52
-
53
-
54
-
55
-
56
-
57
-
58
-
59
-
60
-
61
-
62
-
63
-
64
-
65
-
66
-
67
-
68
-
69
-
70
-
71
-
72
-
73
-
74
-
75
-
76
-
77
-
78
-
79
-
80
-
81
-
82
-
83
-
84
-
85
-
86
-
87
-
88
-
89
-
90
-
91
-
92
-
93
-
94
-
95
-
96
-
97
-
98
-
99
-
100
-
101
-
102
-
103
-
104
-
105
-
106
-
107
-
108
-
109
-
110
-
111
-
112
-
113
-
114
-
115
-
116
-
117
-
118
-
119
-
120
-
121
-
122
-
123
-
124
-
125
-
126
-
127
-
128
-
129
-
130
-
131
-
132
-
133
-
134
-
135
-
136
 |
 |
5
efforts to strengthen the core characteristics that make Honda unique in
order to continue creating new value for our customers, such as by com-
mercializing the HondaJet and solar cell businesses, bringing these projects
a step closer to reality.
Environment
As to the economic conditions surrounding Honda during fiscal 2007,
although crude oil prices became relatively more stable other raw materials
prices continued to significantly increase. In the United States, despite
slowing growth in personal consumption and capital investment, strong eco-
nomic growth continued, albeit at a slightly slower rate, and the economies
of Europe sustained a gradual recovery. Rapid economic growth also per-
sisted in Asian countries, particularly China and India. In Japan, increases
in capital investments and other factors supported a gradual economic
recovery, although personal consumption was lackluster.
Overview of Fiscal 2007 Operating Performance
Tumultuous change characterized the business environment in key world
markets. Amid increasingly stringent competition, we remained proactive in
our efforts to launch products that create new value. These undertakings
paid off in the form of higher unit sales in each of our businesses—
motorcycles, automobiles and power products—and revenues grew for the
seventh consecutive year as each of our businesses expanded.
Despite a demanding competitive environment, increased overseas unit
sales and the currency effects caused by the depreciation of the Japanese
yen rose profits, but income fell for a variety of reasons. We experienced the
negative impact of changes in our model mix, as significantly increasing
gasoline prices prompted a shift in demand toward compact cars. The cost
of steel, aluminium and precious metals substantially increased, and selling,
general and administrative expenses accompanied the rise in unit sales.
R&D expenses also rose, as we spent more on safety and environmental
technologies and worked to improve the attractiveness of our products.
Furthermore, the gain that we posted in fiscal 2006 on the return of the
substitutional portion of the Employees’ Pension Funds to the Japanese
government was absent in fiscal 2007.
Motorcycle Business
In key Asian markets, demand for motorcycles as an essential mode of
transportation continued to grow. Sales in Latin America remained strong,
mainly in Brazil, where economic performance was stable.
Since mid-2005, Indonesia, which is a major market for our products in
Asia, has been affected by substantially increasing gasoline prices, coupled
with substantially high inflation and interest rates, which depressed overall
demand. However, a turnaround in this situation from mid-2006 allowed our
equity-method affiliate there to stage a recovery in sales.
HondaJet