Honda 2013 Annual Report Download - page 9

Honda’s consolidated net sales and operating revenue increased 24.3% from the previous
fiscal year to ¥9,877.9 billion. This was mainly the result of increased revenue in automobile
business operations, which recovered from the impact of the Great East Japan Earthquake and
the flooding in Thailand as well as favorable foreign currency translation effects.
Net income grew 73.6% year on year to ¥367.1 billion, resulting in earnings per share rising
to ¥203.71.
In our motorcycle business operations, sales increased primarily in India and Thailand, but
this was partly offset by diminishing sales in Brazil and Vietnam.
In our automobile business operations, sales grew throughout the world. This was largely
attributable to markets recovering from the impact from the Great East Japan Earthquake and
the flooding in Thailand, and the positive effects of new car model introductions.
In our power products business operations, sales were steady for engines, generators and
certain other products in North America, as well as pumps and certain other products in Asia.
Future Initiatives
True globalization through structural reforms to stay a step ahead of
the changing times
Structural changes in the global economy due to greater awareness of environmental issues
worldwide and the growth of emerging countries have had a significant impact on our business
activities. Our approach to date as a manufacturer has been to develop products for western
and other developed markets, before expanding sales by modifying these products to suit the
different specifications of regional markets around the world. However, market competition is
intensifying with the growth of emerging economies, and the spread of information online is
exerting a significant influence on customer preferences. Going forward, this will require us to
make products tailored to every region of the world more speedily and affordably.
It is essential for us to create a framework and systems to respond to such changes if Honda
is to achieve sustained growth in the future. In April 2013, as the first step in this process, we
reorganized our operations to put the manufacturing functions for motorcycles, automobiles
and power products under the control of the respective business divisions. By focusing our
manufacturing resources at the divisional level, we aim to speed up decision-making and
enhance our ability to cater to market trends and evolving customer preferences with greater
speed and precision. We are also reinforcing production capabilities by integrating manufacturing-
related divisions.
At the same time, we are reforming production systems and building new plants as part of
our ongoing efforts to increase production capacity and boost efficiency. We aim to cater to the
varied needs of customers in different regions while seeking to reap economies of scale from
global procurement and production.
In an era of rapid change, we will increase the value of the Honda brand by upgrading our
ability to innovate, while working to achieve true globalization based on satisfying the needs of
customers in every region of the world.
Motorcycle Business
Growth framework optimally in tune with customer needs
in each region
Many people in emerging countries such as India and Indonesia now use motorcycles to com-
mute to work, and this trend is driving the continued volume growth in these major markets. In
2012, we launched the Dream Yuga in India as a model offering a competitive combination of
performance and price in the 100cc segment, the largest of the “commuter” motorcycle market.
Sales rose substantially as a result. We followed this with the launch of the Dream Neo model in
2013 to give customers a wider choice. Our New Technical Center in India began full-scale
operations in January 2013, bringing together the R&D, production technology, procurement
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