A mixed report on motorcycle sales – May 15, 2006

Yamaha cycle sales up 31 percent in 1Q
Yamaha Motor Co. Ltd. says an attractive exchange rate, increased motorcycle sales in Asia, and brisk sales of all-terrain vehicles (ATVs) in the United States combined to create a record net profit for the company’s first quarter ended March 31.
Yamaha first quarter net income was Y28.1 billion ($245 million), up 22.2 percent compared to net income of Y22.9 billion ($194 million) for the same three-month period last year. Basic net income per common share for the quarter was Y98.28, up from Y81.36 for the same period in 2005.
Total first quarter sales were Y398.9 billion ($3.5 billion), up 21 percent compared to the same period in 2005.
Operating income was Y36.97 billion ($326 million), up 14 percent.
Yamaha said it sold 1.07 million motorcycles worldwide during the recent three-month period, up from 839,000 units during last year’s first quarter.
First-quarter motorcycle sales were Y240.5 billion ($2.1 billion), an increase of 31.4 percent from the previous first quarter; marine sales were Y69.4 billion ($612 million), up 9.6 percent; and power product sales were Y51.8 billion ($457 million), up 14.4 percent.
The company said sales were boosted by increased interest in small displacement four-stroke motorcycles in Asia; and by sport bikes and cruisers, outboard motors, personal watercraft and side-by-side vehicles in the United States. Sales in Latin America also exceeded expectations.
For the full year ending Dec. 31, 2006, Yamaha expects to post net profit of Y65 billion ($573 million) and operating profit of Y115 billion ($1 billion) on sales of Y1.45 trillion ($12.8 billion). The company anticipates global sales of 4.55 million two-wheelers and 274,000 ATVs.
In a January brief to investors, Yamaha Motor Co. Ltd. President Takashi Kajikawa said the manufacturer has been implementing a basic strategy of balancing value, profitability and growth.
“We must enhance the competitiveness of our core motorcycle business in particular if we are to achieve further growth,” Kajikawa said. “In the motorcycle business in Asia and the automotive engine business, we are working to maximize growth opportunities, while in the motorcycle business in North America and Europe, the outboard motor business, and the ATV business, we are focused on attaining high profitability.
“To that end, in mature markets such as Europe and the United States, we will focus on creating high added value and securing a large market share.”
Kajikawa said Yamaha hopes to create demand and open markets in Japan to capitalize on some positive effects of recent deregulations, and said Yamaha hopes to further strengthen the manufacturing and sales
foundation in India, China and Brazil, where profitability and market share remain relatively low.
Honda cycle sales slip 2 percent in 2005
Japan’s Honda Motor Co. said automobile sales in North America, a weaker yen, cost-cutting efforts and a special profit made up for lackluster motorcycle sales for the company’s year ended March 31.
Honda said net income for the fiscal fourth quarter ended March 31 was Y219.5 billion ($1.91 billion), up 133.4 percent from the same period in 2005. Basic net income per common share for the quarter was Y239.78 ($2.04), up from Y101.43 for the same period in 2005. Two of Honda’s American Depository shares represent one common share.
Fourth-quarter sales were Y2.834 trillion ($24.7 billion), an increase of 20.6 percent compared to the same period in 2005.
Operating income for the fiscal fourth quarter totaled Y340.8 billion ($2.9 billion), an increase of 142.8 percent compared to the same period in 2005. The increase in operating income was primarily due to the return of a portion of the employees’ pension funds to the Japanese government, which offset the negative impact of increased selling, general and administrative expenses and research and development expenses.
With respect to Honda’s sales in the fiscal fourth quarter by business category, motorcycle unit sales totaled 2.413 million units, a decrease of 11.2 percent from the same period in 2005. Honda’s automobile sales totaled 901,000 units, up 4.9 percent from last year’s fourth quarter.
FULL YEAR
Honda’s net income for the fiscal year ended March 31 was Y597.0 billion ($5.082 billion), up 22.8 percent from the same period in 2005.
Basic net income per common share for the
fiscal year was Y648.67 ($5.52), up from Y520.68 last year.
Honda’s year-end sales were Y9.907 trillion ($84.345 billion), up 14.5 percent. Operating income for the fiscal year totaled JPY 868.9 billion ($7.397 billion), an increase of 37.7 percent compared to fiscal 2005.
With respect to Honda’s sales in the fiscal year by business category, motorcycle sales totaled 10.271 million units, down 2 percent from the same period in 2005, and automobile sales totaled 3.391 million units, an increase of 4.6 percent.
In a mid-year address to shareholders last June, Honda Motor Co. President and Chief Executive Officer Takeo Fukui said the
company’s powersports business has different goals in each of the countries it does business.
He said Honda’s plan for the expanding motorcycle market in Asia is “to focus on cost reduction in areas marked by intense competition” and said the goal is to increase sales through price-competitive products. Factory capacity has already increased in India and will be boosted this year in Indonesia, China, the Philippines and Thailand.
“In Europe, we will work to increase sales of sports bikes, which are popular there; in the all-terrain vehicle category, we are targeting higher sales of core models, focusing on North America; and in other regions, we will seek to boost sales, especially in Brazil, where growth continues unabated,” Fukui said. psb