Key markets for Honda
Previously, we looked at how Honda Motor Company (HMC) began its operations in 1948, much later than its Japanese peer Toyota (TM). Since then, the company has come a long way and is currently the largest motorcycle manufacturer in the world by volume.
Now, let’s take a look at some of the key geographical markets for Honda.
North America: Honda’s largest market
North America is the largest single market for Honda Motor Company (HMC). In fiscal 2016,[1. April 2015–March 2016] North America accounted for 56% of its total revenues.
As you can see in the chart above, the company’s revenues from the region have more than doubled in the last five years. While Honda has been witnessing a minor slowdown in its other key markets, including Japan and Europe, for the last couple of years, North America has remained strong with good profitability. These higher revenues from North America were primarily driven by strong demand for the Honda Civic and Honda HR-V models.
General Motors (GM) is the largest automaker in North America and has the highest market share in the region. Among the other automakers (VCR), Ford (F) and Fiat Chrysler (FCAU) also have significant exposure to the North American auto market.
Declining sales in Honda’s home market
As you can see in the chart above, Honda’s sales from Japan have been declining lately due to slowing auto demand in the region. In fiscal 2016, 12% of the company’s total revenues were from its home market, much lower than 19% in fiscal 2012.
Other automakers, including Toyota (TM) and Nissan, also have reported a recent decline in their revenues from Japan.
Honda enjoys a strong brand image in the Asian market. In terms of revenues, Asia is the second-largest geographical market for Honda. Notably, the company’s revenues from Asia have doubled in the last five years, as shown in the chart above. These higher revenues from the region were mainly driven by growing auto demand from China and India.
In the next article, let’s look at Honda’s key business segments.