HONDA MOTOR CO., LTD.
7267・Prime Market・Transportation Equipment
Business
Honda Motor Co., Ltd. is a comprehensive mobility company established in 1948 that develops and sells motorcycles, automobiles, and Power Products, along with financial services, on a global scale. The group comprises 346 companies, including 282 consolidated subsidiaries and 64 equity-method affiliates, and boasts revenue of ¥21,796,610 million (FY2026, ending March 2026). In the Motorcycle Business, the company sells over 22.1 million units annually worldwide (Honda Group unit sales), primarily in Asia, holding one of the top market shares globally. In the Automobile Business, the company focuses mainly on the North American market, centering on Light Trucks (SUVs, Minivans, etc.). The Financial Services Business supports product sales through sales financing and leasing, forming a stable source of revenue.
Business Model
In addition to revenue from manufacturing and sales of products, the company employs a composite model in which its group of finance subsidiaries (American Honda Finance and others) provide Retail Finance (Loans), Wholesale Finance (Floor Plan), and Operating Lease offerings, promoting product sales while also earning interest and lease income. The receivables balance of the Financial Services Business reached ¥9,893,496 million (up approximately 9.5% year on year), and Operating Lease assets also expanded to ¥6,433,793 million, functioning as a stable revenue source that complements fluctuations in the product businesses.
Company Strengths
In FY2026 (ending March 2026), the Motorcycle Business achieved revenue of ¥4,018,837 million (up 10.8% year on year) and operating profit of ¥731,926 million (operating margin of approximately 18.2%). Honda Group unit sales rose 7.2% year on year to 22,101 thousand units, with expanded sales in growth markets such as India, Brazil, and the Philippines. As a core business combining high profitability with sales scale, it underpins consolidated earnings.
Of the Automobile Business's external customer revenue of ¥13,863,362 million, North America accounted for approximately 66% at ¥9,213,428 million. On a retail unit sales basis, Light Trucks (SUVs, Minivans, etc.) comprised 57% of the mix, with Light Trucks generating contribution profit approximately 15% higher than the average across all categories. The North American sales network, built around core models such as the CR-V, PILOT, and Odyssey, is an asset that competitors cannot easily replicate in a short period.
The Financial Services Business recorded revenue of ¥3,529,484 million and operating profit of ¥275,532 million. Finance-related receivables (current and non-current combined) increased approximately 9.5% from the previous fiscal year-end to ¥9,893,496 million, while Operating Lease assets also expanded from ¥5,748,187 million at the previous fiscal year-end to ¥6,433,793 million. This constitutes a structural strength that generates stable revenue and cash flow even amid fluctuations in the product businesses.
ENVALITH's Perspective
Performance Trend
Revenue was ¥21,796,610 million, a marginal increase of +0.5% year on year, as growth in the Motorcycle Business (+10.8%) partially offset the decline in the Automobile Business. Meanwhile, operating profit plunged from ¥1,213,486 million in the previous fiscal year to ¥△414,346 million. The main cause was a lump-sum recognition of EV-related losses totaling more than approximately ¥1.6 trillion, stemming from a large-scale revision of the four-wheel electrification strategy in response to changes in the EV market environment (review of U.S. subsidies, relaxation of fossil fuel regulations, and intensifying competition in China). Net loss attributable to owners of the parent was ¥△423,941 million. Operating cash flow improved significantly to ¥1,135,261 million from ¥292,152 million in the previous fiscal year, and cash and cash equivalents at fiscal year-end increased to ¥5,118,477 million.
Growth Strategy
Aiming for earnings recovery through four pillars: strengthening HEV, restructuring EV strategy, stable Motorcycle Business growth, and intelligence-driven technology
In response to changes in the EV market environment in the US and China, the company decided to discontinue the launch and development of EV models planned for production in North America. In FY2026 (ending March 2026), EV-related losses will be processed on a large-scale, lump-sum basis, aiming for earnings recovery in FY2027 (ending March 2026) and beyond as these losses fall away. As a subsequent event, the risk of additional expenditures to business partners remains, with the amount currently under investigation.
Following the review of the EV strategy, HEV sales are being expanded through strengthening the product lineup centered on the next-generation hybrid system "e:HEV." By leveraging the strong customer base in the North American Light Trucks (SUVs, Minivans, etc.) market and increasing the proportion of high-profitability HEV sales, the company aims to improve the profit margin of the Automobile Business. The sales impact of +¥266.7 billion in FY2027 (ending March 2026) is expected as a result of these efforts.
The company continues to improve sales volumes and prices in major Asian markets such as India, Vietnam, and the Philippines. In FY2026 (ending March 2026), high profitability was maintained, with revenue from external customers of ¥4,018,837 million and operating profit of ¥731,926 million. Full-scale market introduction of electric motorcycles is being promoted toward the 2030 target (annual sales of 4 million units across 30 models).
The balance of receivables related to financial services (current and non-current combined) expanded to ¥9,893,496 million, and Operating Lease assets expanded to ¥6,433,793 million. Through sales finance and leasing operations linked to Honda product sales, the business functions as a stable earnings source that complements fluctuations in the profit and loss of the product businesses.
Last updated: July 19, 2026