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Honda Motor’s Financial Results for Fiscal Year 2020
Honda Motor's consolidated business results for fiscal year 2020 showed a 11.8% decrease in net sales to 13.17 trillion JPY and a 4.2% increase in operating profit to 660.2 billion JPY compared to the previous year. Earnings increased by 26.5 billion JPY due to a decrease in allowances for credit losses in the sales finance business in North America and cost reduction effects. In addition, net profit increased 36.4% to 695.4 billion JPY.
In the automobile business, sales decreased 13.9% to 8.77 trillion JPY, operating profit fell 41.1% to 90.3 billion JPY, and the operating profit margin declined 0.5pp to 1.0%. Conversely, in the motorcycle business, sales revenue declined 13.2% to 1.78 trillion JPY and operating profit fell 21.4% to 224.6 billion JPY, while the operating profit margin remained at a high level of 12.6%. Looking at the operating profit per unit sold worldwide, it was 34,000 JPY for automobiles and 22,000 JPY for motorcycles, the difference narrowing to 12,000 JPY. The difference in fiscal year 2016 was 121,000 JPY, clearly indicating a downward trend in operating profit of automobiles. The main reason for the decline in profits in the automobile business is said to be the stiff competition in the North American market. Unit sales of automobiles increased 80% from fiscal year 2016 to 5.22 million JPY in Asia, while unit sales in North America went up only 9.2% to 3.16 million JPY. This was mainly due to the fact that Honda's product lineup of light trucks, which are more popular and expensive than sedans, is small in North America.