Honda 2012 Annual Report Download - page 8

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During the past year, we faced a challenging economic environment. In Europe, the
sovereign debt crisis, rising oil prices and other factors led to stagnation, which
slowed the economy to a crawl. In the United States, although the overall economy
continued to show signs of a gradual recovery, a high unemployment rate, sluggish
sales of homes and fiscal austerity could result in the economy slipping into recession.
Meanwhile, the pace of growth slackened in Asian countries such as China and India,
although a general recovery is underway in other countries in the region. In Japan,
economic conditions remained challenging amid a mild recovery.
Under these conditions, Honda’s consolidated net sales and other operating rev-
enue declined 11.1% to ¥7,948.0 billion, despite a second-half recovery in production
and higher sales in our motorcycle business operations. The overall decline mainly
reflected sharply lower automobile production worldwide due to the impact of the
Great East Japan Earthquake and flooding in Thailand.
Net income declined year on year to ¥211.4 billion, resulting in earnings per share
falling to ¥117.34.
From a business segment standpoint, the floods in Thailand had a negative impact
on motorcycle sales. However, sales in India and Vietnam increased in line with greater
production capacity. We also realized solid sales growth in Brazil.
In our automobile business operations, our worldwide automobile sales were signifi-
cantly lower than the previous year. This was the result of supply chain disruptions
caused by the Great East Japan Earthquake and the floods in Thailand, and produc-
tion shutdowns caused by flood damage to Thailand manufacturing facilities.
In our power products business operations, sales of assembled machinery such as
trimmers were strong in North America, while sales of pumps were strong in Asia on
the back of market expansion.
Future Initiatives
Straight back onto a growth trajectory
Fiscal 2012 was a year of trials and tribulations for Honda due to the extraordinary
damage caused by the two natural disasters. We began recovery efforts immediately
after the March 2011 earthquake in Japan and also rapidly began making preparations
for recovery operations in Thailand even before the floodwaters had subsided. I believe
our prompt actions enabled us to minimize the impact of the natural disasters.
Annual Report 201206