Honda 2016 Annual Report Download - page 7

¥635.4 billion a decrease of 21.2% compared to the previous
fiscal year, and profit for the year attributable to owners of the
parent amounted to ¥344.5 billion, a decrease of 32.4%.
Progress on Two Core Themes
Since my appointment as CEO, I have promoted two guiding
themes for our business activities. These are the further
advancement of our six-region global operation structure, and
the development of challenging products that are characteris-
tic of Honda. Based on these themes, we have considered
measures and are making steady progress in their execution.
Further advancement of our six-region global
operation structure
Honda divides the world into six regions, each of which oper-
ates as an autonomous organization with its own functional
capabilities. In the automobile business, we have used this
structure to develop regional models such as the Pilot in North
America and the Brio series in Asia, which support growth by
catering to the needs of customers in those regions. We have
also developed the Civic , CR-V , Accord , Fit and HR-V as
global models that we aim to market in every region. One of
the strengths of Honda is that we have created product
Fiscal Year Ended March 31, 2016
in Review
In terms of the business conditions that Honda faced, the
U.S. economy continued to recover as employment condi-
tions improved amid modest growth in housing starts and
higher consumer spending, among other factors. Economic
conditions recovered gradually in Europe as well, with
employment and consumer spending both improving. The
picture was mixed in Asia, with India posting a mild recovery
even as China, Indonesia, and Thailand experienced varying
degrees of economic slowdown. In Japan, growth remained
modest as employment conditions generally improved and
capital investment recovered.
In this environment, the Honda Group strove to build a
stronger corporate enterprise that can respond swiftly and
accurately to changes in the many and varied needs of cus-
tomers and society at large. On the research and development
front, the Honda Group took proactive steps in developing
advanced technologies to enhance safety and environmental
technologies as well as product appeal. On the production
front, the Honda Group revamped its framework to further
fortify its production operations and enable it to respond to
changes in demand on a global basis. On the sales front, the
Honda Group proactively enhanced its product lineup by
launching products embodying new forms of value and
supplying products across national boundaries.
As a result, Honda’s consolidated sales revenue for the fiscal
year ended March 31, 2016 totaled ¥14,601.1 billion, an
increase of 9.6% compared to the previous year, reflecting higher
sales in the automobile and financial services business opera-
tions. Operating profit amounted to ¥503.3 billion, a decrease of
24.9% compared to the previous fiscal year, due mainly to
increased SG&A expenses including quality related product
warranty expenses, and negative currency translation effects,
despite gains from increased sales, changes in product mix and
cost-reduction efforts. Profit before income taxes amounted to
Honda Motor Co., Ltd. Annual Report 2016 06
3To Our Shareholders
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2Financial Highlights
4CFO Interview
5Review of
Operations
6Corporate
Governance
7Financial Section
8Investor Relations
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1The Power of
Dreams