Honda Motor Co Ltd.
) develops, produces and manufactures a variety of motor products,
ranging from small general-purpose engines and scooters to
specialty sports cars. Honda competes with players like Toyota (
), Ford (
(ETR:DAI), Volkswagen (ETR:VOW), Hyundai (SEO:005380) and
Aside from their core automobile and motorcycle businesses,
Honda also manufactures garden equipment, marine engines, personal
watercraft and power generators, among others. Honda manufactures a
variety of power products including tillers, portable generators,
general-purpose engines and grass cutters. Additionally, Honda
offers a variety of financial services to its customers and dealers
through finance subsidiaries. Honda conducts its operations in
Japan and worldwide.
We recently launched coverage of the company with a Trefis Price
estimate of $45.04 for Honda's stock, about 3% above the current
market price of $43.79. We've broken down our analysis of Honda
into seven major business segments as shown below.
- Vehicle Leases & Loans
- Honda Vehicles Sold in North America
- Motorcycles, ATVs & Water Motors
- Honda Vehicles Sold Internationally
- Honda Vehicles Sold in Japan
- Generators, Pumps & Other Power Products
Honda was the first Japanese automobile manufacturer to release
a dedicated luxury brand, Acura, in 1986 and has been the world's
largest motorcycle manufacturer since 1959, as well as the world's
largest manufacturer of internal combustion engines measured by
volume. In 2010, the company was the eighth largest automobile
manufacturer based upon sales figures.
Honda's automobile division contributes more than 37% to the
overall value of Honda. We have broken down the total automobile
division into four separate divisions - Honda vehicles sold in
North America (15.9% of total value), Honda vehicles sold
internationally (14.2% of total value), Honda vehicles sold in
Japan (6.1% of total value), and Acura (1.3% of total
After the automobile divisions taken together, the vehicle lease
and loan business is the most valuable division for Honda.
Surprisingly, Honda's motorcycles, ATVs & water motors
division and Honda vehicles sold in North America are nearly
equal in value.
Honda offers a variety of financial services to its customers
and dealers through finance subsidiaries in countries including
Japan, the United States, Canada, the United Kingdom, Germany,
Brazil and Thailand, with the aim of providing sales support for
its products. The services of these subsidiaries include:
- Retail lending
- Leasing to customers
- Wholesale financing to dealers.
Financial services revenues in 2009 constituted 6% of the
overall Honda revenues worldwide. According to the breakdown by
geographical markets of Honda's financial services, North America
contributes the maximum value with a revenue share of 90.6% in
Honda's vehicle financing division is driven by high
margins and has about $53 billion of leases and loans outstanding,
on which it earns around 12% as interest and lease payments.
You can see the complete
$45 Trefis Price estimate for Honda's stock