Integration Project of Analyst Preparation: Honda Motor Co. Ltd
10-K Integration Project – Analyst Preparation Assignment
Nanette Guzman
Honda Motor Co., LTD
May 23, 2013
PESTLE 1. Political: Total industry automobile sales in Japan for fiscal year 2012 rose approximately 3% to approximately 4.75 million units. Although the Great East Japan Earthquake and the floods in Thailand had an impact, automobile sales remained stable due to government stimulus policies that provided tax breaks and subsidies for eco-car purchases in the second half of the fiscal year as well as other factors. (p.19) Taxes and governmental policies both domestic and foreign are critical in the automobile industry. Despite the earthquake in Japan, the governmental stimulus had a major impact on their automobile sales during 2012, emphasizing that laws and regulations can help us decide the probability of success in the global market. 2. Economical: In calendar year 2011, total industry sales in the United States increased approximately 9% over the previous year to approximately 12.8 million units. Sales of small cars and SUV’s in particular were firm, reflecting an upswing in consumer sentiment and an improvement in the employment rate. (p.19)
Oil prices have recently been rising and will probably continue to rise as the world’s oil sources are depleted. This could mean that there will be a fall in demand for regular fuel cars and a rise in demand for smaller more efficient cars. Honda is producing hybrid technology which will seem more attractive due to higher oil prices. Also, as consumer confidence returns to the US economy, fuel efficient SUV’s are also an alternative to consumers who aren’t comfortable driving smaller cars on America’s highways. As Honda adjusts its production to a more fuel efficient or hybrid/electric technology, they will have the potential to see increased revenue. 3. Sociocultural: In a world of rising environmental awareness that is undergoing rapid structural economic change, people are showing a
Nanette Guzman
Honda Motor Co., LTD
May 23, 2013
PESTLE 1. Political: Total industry automobile sales in Japan for fiscal year 2012 rose approximately 3% to approximately 4.75 million units. Although the Great East Japan Earthquake and the floods in Thailand had an impact, automobile sales remained stable due to government stimulus policies that provided tax breaks and subsidies for eco-car purchases in the second half of the fiscal year as well as other factors. (p.19) Taxes and governmental policies both domestic and foreign are critical in the automobile industry. Despite the earthquake in Japan, the governmental stimulus had a major impact on their automobile sales during 2012, emphasizing that laws and regulations can help us decide the probability of success in the global market. 2. Economical: In calendar year 2011, total industry sales in the United States increased approximately 9% over the previous year to approximately 12.8 million units. Sales of small cars and SUV’s in particular were firm, reflecting an upswing in consumer sentiment and an improvement in the employment rate. (p.19)
Oil prices have recently been rising and will probably continue to rise as the world’s oil sources are depleted. This could mean that there will be a fall in demand for regular fuel cars and a rise in demand for smaller more efficient cars. Honda is producing hybrid technology which will seem more attractive due to higher oil prices. Also, as consumer confidence returns to the US economy, fuel efficient SUV’s are also an alternative to consumers who aren’t comfortable driving smaller cars on America’s highways. As Honda adjusts its production to a more fuel efficient or hybrid/electric technology, they will have the potential to see increased revenue. 3. Sociocultural: In a world of rising environmental awareness that is undergoing rapid structural economic change, people are showing a