Although Honda's performance in the Chinese market is not outstanding, it has still achieved good performance reports in the global market.
Recently, Honda Motor Corporation (HMC. US) released its performance report for the second quarter of the fiscal year 2024 (April 2023 March 2024) from July 2023 to September 2023. During the reporting period, Honda achieved a revenue of 4.98 trillion yen (approximately RMB 239.6 billion), a year-on-year increase of 17% compared to 4.26 trillion yen (approximately RMB 205 billion) in the same period last year; The operating profit was 302.13 billion yen (approximately 14.5 billion yuan), an increase of 31% year-on-year from 231.24 billion yen (approximately 11.1 billion yuan) in the same period last year, but did not meet the expected 35.016 billion yen (approximately 16.8 billion yuan); The net profit was 253.2 billion yen (approximately 12.2 billion yuan), a year-on-year increase of 34%.
Regarding the growth in performance, Honda Motors stated that due to factors such as higher product pricing, sales growth (especially in the North American market), and the weakening yen, Honda achieved a year-on-year increase in operating profit in the second fiscal quarter.
Strong demand in the US market
From the perspective of automotive business, Honda sold a total of 1.03 million vehicles globally from July to September this year, a year-on-year increase of 6.5%. Among them, Honda delivered 385000 vehicles in the North American market, a 40% increase from 275000 vehicles in the same period last year; The Japanese market delivered 144000 vehicles, a slight increase of 8% year-on-year; The European market delivered 23000 vehicles, compared to 22000 vehicles in the same period last year, an increase of only 1000 vehicles. Unlike the aforementioned markets, the delivery volume of the Asian market (mainly China) from July to September was only 446000 units, a 13% year-on-year decrease from 511000 units in the same period last year, making it the only market where Honda's delivery declined.
In response, Honda officially stated, "The strong demand in the US market, the easing of the impact of semiconductor supply disruptions, and the high competitiveness of new car models launched have shown significant growth compared to the same period last year. However, due to factors such as the expansion of the Chinese new energy vehicle market and intensified price competition, the demand in the Chinese market has declined
Despite a significant increase in sales in the US market, according to Honda's Executive Vice President Shinji Aoyama, due to the weakening demand in the US market, Honda has lowered its sales target for the North American market this fiscal year, from 1.645 million units to 1.62 million units. In addition, Honda's global sales have also decreased from the previously predicted 4.35 million units to 4.1 million units.
However, Honda expects sales revenue to increase by 18% to 20 trillion yen (approximately RMB 962.2 billion) in the 2024 fiscal year, operating profit to increase by 54% year-on-year to 1.2 trillion yen (approximately RMB 57.7 billion), and net profit to increase by 43% year-on-year to 930 billion yen (approximately RMB 44.7 billion).
In terms of intelligent and electrified transformation, Honda plans to invest 8 trillion yen (approximately RMB 384.6 billion) in research and development over the next 10 years, including investment in electrification and software technology.
In terms of products, Honda is currently launching new electric vehicles such as the Acura ZDX and Honda Prologue in North America. In terms of commercial layout, Honda has reached an agreement with BMW and Ford to jointly establish a joint venture company, ChargeScape. The joint venture aims to feed back the remaining electricity to the grid through new energy vehicles, helping users create additional profits while stabilizing the North American power grid system.
At the same time, Honda has also signed a memorandum of understanding with Mitsubishi, which will fully leverage the advantages of the two companies in sustainable business models, starting from "lifelong battery management business" and "building V2G", to enter the power infrastructure business of pure electric vehicles (EVs) and jointly study the commercialization of electric vehicles in Japan.
Automotive industry observer Xu Jiaxin told China Times: "With the development of electrification, Honda has also seen the potential of the new energy market, so it has started a series of infrastructure layout
Accelerate electrification transformation
As Xu Jiaxin said, the explosion of the new energy market has shown potential to all enterprises. Therefore, Honda is also increasing its layout in the new energy market. According to the plan, Honda will launch 30 pure electric vehicles in the global market by 2030, with a planned annual production of over 2 million vehicles; By 2040, the sales share of pure electric vehicles and fuel cell vehicles (FCEVs) will reach 100%.
In the Chinese market, Honda has announced that it will no longer launch new fuel models in China by 2030. At this year's Shanghai Auto Show, Honda's Chief Operating Officer, Shinji Aoyama, stated: "In the automotive industry, after 2027, all Honda models launched in China will be hybrid and pure electric vehicles, and no new pure fuel models will be introduced. By 2035, Honda in China will achieve 100% sales of pure electric vehicles." This also means that Honda will accelerate the process of electrification transformation.
In order to catch up with the progress of intelligent transformation, Honda will also focus on the fields of software and intelligent networking. According to the plan, Honda is expected to invest approximately 5 trillion yen in the fields of electrification and software (with research and development expenses of approximately 3.5 trillion yen and investment of approximately 1.5 trillion yen). We plan to invest approximately 1 trillion yen (approximately 50.76 billion yuan) in the next 10 years to prepare for future growth, including "new areas" and "resource recycling".
In addition, Honda's two joint venture companies in China have also launched their own new energy transformation plans. In July of this year, Dongfeng Honda released a new strategy of "Creating the Future 2030", announcing that by 2027, Dongfeng Honda will no longer launch fuel powered new cars; By 2025, the electrification ratio will reach over 50%, and more than 10 pure electric models will be launched before 2030.
GAC Group also explicitly stated in its previous third quarter report that starting from 2027, GAC Honda will no longer launch new pure fuel models; e: The second pure electric product of NP brand is expected to be officially launched in 2024. In addition, GAC Honda's first green low-carbon electric vehicle "digital intelligence" factory is expected to be completed and put into operation next year, with an annual production capacity of 120000 vehicles.
It is worth mentioning that the Dongfeng Honda e: NS2 mass production version and GAC Honda e: NP2 mass production version will be officially released at the 2023 Guangzhou Auto Show. These two models are sister cars to each other and are based on Honda's exclusive intelligent and efficient pure electric architecture "e: N Architecture F".
In the era of new energy, consumer demand has shifted from being 'usable' to being 'user-friendly' and 'practical'. In this context, if overseas brands want to develop in the Chinese market, they need to be close to Chinese users for development. Although this process is complex and challenging, it is also the foundation for the survival of overseas enterprises, "said Xu Jiaxin.