HONDA MOTOR CO., LTD.

Business Details

This segment engages in research and development, production, and sales of motorcycles, ATVs (All-Terrain Vehicles), Side-by-Sides, and related parts. Its primary markets are in Asia (India, Indonesia, Vietnam, Thailand, etc.), with global production and sales bases. In FY2026 (ending March 2026), while the Automobile Business fell into a significant operating loss due to EV-related losses, the Motorcycle Business recorded operating profit of ¥731,926 million, functioning as the core segment supporting the entire group's earnings.

Recent Overview

Both revenue and operating profit increased year on year, driving group earnings amid the loss in the Automobile Business.

In FY2026 (ending March 2026), the Motorcycle Business achieved revenue growth and profit growth, with revenue from external customers of ¥4,018,837 million (up 10.8% year on year) and operating profit of ¥731,926 million (up 10.3% year on year). While the Automobile Business recorded an operating loss of ¥1,411,140 million due to EV-related losses, the Motorcycle Business supported group earnings as the only segment with a large-scale profit. The main driver of revenue growth is believed to be expanding demand in Asian markets.

Key Products

Growth Drivers

• Expanding motorcycle demand in Asian markets (particularly India, Vietnam, and the Philippines): India's total calendar year 2024 motorcycle demand was approximately 19.16 million units, up approximately 15% year on year
• Improvement in unit sales and selling prices, as shown in the 10.8% year-on-year increase in revenue (from ¥3,626,603 million to ¥4,018,837 million)
• Profit increase due to selling price and cost impacts (improved cost ratio and cost reduction effects)
• Increased unit sales in Brazil, North America, and Europe
• Acquisition of new demand through the full-scale rollout of electric motorcycles (2030 target: 30 models with annual sales of 4 million units)

Risks

• Foreign exchange impact (risk of decreased yen-converted overseas revenue due to yen appreciation): foreign exchange impact continues to act as a factor reducing consolidated earnings in FY2026 (ending March 2026)
• Intensifying competition from local emerging EV manufacturers in Asian markets (particularly China and Indonesia)
• Risk of declining demand in some major Asian markets, such as the shrinking Thai market
• Risk of declining sales of existing ICE vehicles amid the transition to electric motorcycles, and increased burden of electrification-related investment
• Risk of future cash flow pressure due to the significant increase in capital expenditures (from ¥94,688 million to ¥135,989 million, up 43.6% year on year)