Honda 2007 Annual Report Download - page 8
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6
Honda Aircraft Company groundbreaking
ceremony
To Our Shareholders
The CR-V, posting strong sales in all markets
(North American market version shown)
Automobile Business
On a global basis, a sharp rise in gasoline prices spurred demand for
automobiles featuring good fuel economy, leading to steady increases in
sales of Honda vehicles in North America and Europe. Sales remained
strong in China, India, Brazil and other emerging economies. In particular,
strong worldwide sales of the new Civic, introduced in September 2005,
continued in fiscal 2007. Sales of the new CR-V, which we launched in
September 2006, also recorded strong worldwide sales results and
contributed to the steady expansion of unit sales.
Power Product and Other Businesses
Unit sales in the power product business increased in all regions in fiscal
2007, mainly in North America and Europe. This rise was supported by
products that play a role in customer lifestyles, such as lawn mowers and
generators, as well as engines for OEM*1 use in construction equipment
and generators.
In December 2006, we established a subsidiary in Japan to manufacture
and sell next-generation thin-film solar cells that we developed using propri-
etary technologies. Sales began in Japan on a limited regional basis in June
2007, and by fall 2007 we expect to commence mass production on an
annual capacity of 27.5 megawatts and full-fledged sales.
Fulfilling an objective that Honda has set through R&D since the time of
its establishment, in October 2004 we formed a joint venture with General
Electric Company, and in 2006, that venture secured orders to supply
compact turbofan engines to two aircraft manufacturers. Furthering these
efforts, in August 2006 we established a subsidiary in the United States to
construct R&D, manufacturing and sales of compact jets. In October 2006,
we began accepting orders for HondaJet, a compact business jet. Deliveries
and associated revenue are scheduled to begin in 2010.
*1: OEM (Original equipment manufacturing)
OEM refers to a manufacturing of products and components supplied for sale under a third-party
brand.
Future Initiatives
The environment in which Honda operates is likely to grow increasingly
challenging. Honda will address this situation by accelerating efforts to
strengthen the core characteristics that make Honda unique as we create
new value and continue to deliver products and services that exceed the
expectations of our customers. In May 2006, I discussed three themes for
achieving this vision—”Establishing advanced manufacturing systems
and capabilities,” “Strengthening the foundation for global growth” and
“Strengthening our commitment to reducing our environmental
footprint”—and we continue to move forward along these lines.
I would now like to introduce our recent initiatives under these themes,
and talk about the measures we have implemented.