Q1 2025 Honda Motor Co Ltd Earnings Call
As for the fiscal first quarter ended June 30 of 2024.
Speaker Change: Start with I'd like to introduce the speakers today.
Speaker Change: Managing Executive Officer CFO, Mr. Eiichi Fuji Buda.
Speaker Change: Mara nice to meet you.
Speaker Change: Okay.
She.
Speaker Change: Operating executive head of accounting and finance that supervisory duties, Mr myself or Colorado Chi.
Speaker Change: Nice to meet you.
Speaker Change: Let's start with the air.
Mr Fred: Mr Fred and Russ a presentation about the area.
Speaker Change: The quarter for quarter, one of the FY 2025, our results and our forecast of the FY 'twenty five.
Mr. Car: Five our full ear and Mister car, but she will elaborate.
Tom: Hey, Tom.
Mr. Car: Thank you very much for your understanding of our business activities as usual, let me present, our first quarter business results of FY 'twenty to 'twenty five.
Mister Car: Starting with the highlights of the financial results.
Mr. Kar: It sells in the motorcycle business the first quarter increased globally, mainly in India and Brazil.
Mr. Car: In the automotive business as well, we had a rubbished ourselves of a hybrid of double dose and thanks to the pricing scheme that reflects improved commercial values. They profits increased year on year in both motorcycle and automobile are businesses as a result operating profit of the entire company marked the highest.
Mr. Car: Ever quarterly profit of a $484 7 billion or 9% of the operating profit margin.
Mr. Car: For China, we're a tough market environment still continues we will revise the volume forecast down by a 220000 units.
Mr. Car: But as we will maintain our previous guidance of the operating profit operating profit margin and the appropriate for the period attributable to the owner of the parent.
Mr. Car: Forex assumption will stay the same because the recent fluctuation of the currency is a substantial.
Speaker Change: Then let me explain the outline of the financial results.
Mr. Car: Speaking of the main market situation of the automobile businesses hybrid models have been successful, making the unit sales increased in Japan, and the United States.
Mr. Car: In China due to expanded new energy vehicle market and a grocery about price competition. The unit sales decline to your own ear in the Mato cycle businesses.
Speaker Change: You need to add sales declined due to economy has slowed down in a Thailand. However, the unit itself increased year on year due to steady demand in India and in Brazil. That's on the whole the total business increased year on year in this segment.
Speaker Change: Regarding the financial results of the first quarter FY 'twenty 'twenty five.
Speaker Change: Operating profit marked a 484.
Speaker Change: 7 billion again up by 92 2 billion a year on year shares appropriate investments accounted for using the equity my thought it was a 1.4 billion, which was down by $41 4 billion.
Speaker Change: Our profit for the quarter attributable to owners of the parent was 394.6 billion up by 31.1 billion operating profit marked the highest ever as our quarterly results.
Speaker Change: Okay.
Speaker Change: With regard to the consolidated business outlook for the FY 2025.
Speaker Change: Operating profit will be 1.42 trillion yen our previous forecast would stand the same as shares of profit of investments accounted for using the equity method will decline due to the unit sales in China being revisited however.
Speaker Change: For the financial year attributable to the owners of the parents will be once really young yearn for which the previous forecast will be maintained full ear Forex assumption will stay the same at a 140 and $4 no change of our previous guidance.
Speaker Change: Annual dividend for FY 2025 is expected to be 68, yeah for sure no change of the previous guidance.
Speaker Change: We announced their share buybacks in the press conference on May 10th which are the progress that the papers July was.
Speaker Change: We have acquired a total of 12.36 million shares worth 20 billion yen altogether.
Speaker Change: By the way Honda as a working on India in the improved on the improvements of our corporate governance as one of the priority issues of our business management, Richard B in the stock market.
Speaker Change: Ashish the trends will be reviewing the course holding of the shares.
Speaker Change: Honda will aim to unwind the course holding practice soon in order to enhance our disciplines on corporate management. Furthermore.
Speaker Change: In July of this year Honda shares owned by non life insurance or banking institutions have been sold off in the public as much as a 500 billion worth of them.
Speaker Change: Having those shares available in public I will help broaden our shareholder base and a wider range of us shareholders can support us for medium and long term perspective.
Speaker Change: Bringing them in Cocreation with US Hunter will aim to build a stronger brand and the business Foundation in order to realize further improvements of our corporate values.
Speaker Change: In addition, a honda or so.
Speaker Change: All the shares that we have been holding or photos in non life and non life insurance and banking institutions as well answer will take the lead to unwind of course holding policy. So that we can improve our corporate governance further on.
Speaker Change: Next Mr cargo cheap will explain the details of the financial results.
Speaker Change: Right.
Speaker Change: At this time and might explain in details.
Speaker Change: Al.
Speaker Change: First of all.
Speaker Change: 2020 and for the first three months.
Speaker Change: Fathers converted same period last year that was in motorcycle business operations Rose two 5.002 million units, mainly due to an increase in nature due to a decline in China. After a dose that was pulled out of 869000 units.
Speaker Change: In power product business operations totaled 822000 units, mainly duty stand with declines in North America and Iraq.
Speaker Change: First quarter consolidated financial results for fiscal year 2025, it's as explained earlier.
Speaker Change: And this explains the factors behind the increase or decrease in profit before tax compared to the same period last year.
Speaker Change: Operating profit increased by 19.2 billion yen compared to the same period of last year and totaled $484 7 billion yen.
Speaker Change: Sure the increase and decrease factors behind this change.
Speaker Change: That was impacted.
Speaker Change: Although there was an increase in profit due to an increase in units an increase in incentives led to a negative impact of $28 4 billion yen selling prices and cost impacts due to the effect of setting prices commensurate with the improvement of product value a positive impact.
Speaker Change: $159 8 billion young what's realized expenses negatively impacted profits by $61 5 billion yen R&D expenses like 127 billion yen the positive impact of exchange rates resulted in an increase of 47.5 billion yen now profit before income taxes due to a decrease in June.
Speaker Change: That was the volume in China. There was a decrease in equity method profit. However, operating profit for the quarter increased by 44.5 billion yen compared to the same period of last year and totaled five trillion 594 billion yen.
Speaker Change: Now operating profit by business segment motorcycle business achieved a record high of $577 6 billion yen for a quarter for automobile business. The total was $222 8 billion the total for potential services.
Speaker Change: Business was $84 9 billion yen. The result for our power products business and others was an operating loss of 700 million yen.
Speaker Change: Free cash flow and operating companies.
Speaker Change: As clothing for onshore business operations was 73.9 billion yen.
Speaker Change: The quarter end balance of net cash was three trillion 744.3 billion yen.
Speaker Change: Operating cash flow, excluding R&D, which represents the source of future investments totaled 435 billion yen.
Speaker Change: Next let me explain the details of the consolidated forecast for FY 'twenty five.
Speaker Change: Sales volume for our motorcycle business operations is 19.8 million units and changed from our previous forecast.
Speaker Change: The mobile business forecast has been revised downwards to $3 9 million units, reflecting a decline in China as well as other changes compared to the previous forecast power products business or patients pay this forecast of $3 six 6 million units remains unchanged.
Speaker Change: Dated financial forecast for FY 'twenty five is.
Speaker Change: As explained earlier.
Speaker Change: The outlook for capital investment.
Speaker Change: She Asian, and amortization and R&D expenditures for FY 'twenty five.
Speaker Change: Unchanged.
Speaker Change: This concludes my presentation. Thank you very much for your attention.
Speaker Change:
Speaker Change: Thank you for your attention.
Speaker Change: Now proceed to the Q&A session.
Speaker Change: <unk>.
Speaker Change: We will take questions via zoom system as previously informed you media participants.
Speaker Change: Due to time constraints each person is limited to two questions when asking your questions. Please turn on your camera and microphone. We appreciate your cooperation.
Speaker Change: If you have any questions. Please use the raise hand button you, let us know thank you.
Speaker Change: Yeah.
Speaker Change: Hi, Sean a question on the first question.
Speaker Change: From NHK Mr. Noguchi. Please.
Mr. Noguchi: Okay Super Chicken NHK Chinese here as well.
Speaker Change: Yes, it was.
Speaker Change: Thank you.
Speaker Change: Two questions. Please.
Speaker Change: Chris.
Speaker Change: Chinese situations Chinese our business in China, the market situations are very tough now.
Gary: And our in this fiscal ear, you're revising your in itself by 220000, but you also have a plan to start a new plant for EV production and what is there for cashew outline of our upcoming Gary our production our structures in China.
Lisa: Lisa explained and is can I explain the second question to ESP.
Speaker Change: Question two.
Speaker Change: It is about Forex foreign currency exchange and we have a assumption of 148 four dollar that is the same as before.
Speaker Change: Our previous.
Speaker Change: Guidance, but nowadays are fluctuating K, a very dramatically and are the 4600 47 again as of today, which is a very different form which was there yesterday and in addition, the dk our share prices also fluctuating very dramatically and how do you think.
Speaker Change: Jake.
Speaker Change: This.
Speaker Change: Fluctuation.
Speaker Change: Thank you very much Mr. Noguchi speaking of Chinese a situation as we are mentioning the air side of the fiscal year.
Speaker Change: Two months.
Speaker Change: We are thinking about 101 point or two maybe.
Speaker Change: Our capacity.
Speaker Change: $1 2 million of trial production.
Speaker Change: Production capacity in China and by the end of this fiscal year, New EV plant.
Speaker Change: With the two new joint venture programs.
Speaker Change: With a one.
Speaker Change: And the other two start in sequence and then are we are trying to bring it down to.
Speaker Change: About one pointed 2 million of capacity in the end, we will try to reduce by 120 <unk> hundred a divergent or you need to have protection. So that was what we said in the beginning and Uh Huh 1 billion are in eyes, and a 200000 units for EV.
Speaker Change: That was the plan for the reduction as we explained but as of today are in the first quarter and as of July.
Speaker Change: We.
Speaker Change: <unk> set the plan of a 101 point or six.
Speaker Change: Million and then we make a get down 240000 units that is the airplanes of the simplicity or.
Speaker Change: As of now.
Speaker Change: And.
Speaker Change: We're going to have the 500000 do you need to be adjusted.
Speaker Change: That is associated with the fixed cost and in China as such is a has been a very sensitive issue and we couldn't I explained who well about it are we could disclose too much but now the Chinese are headquarters have.
Speaker Change: Green will be a part of our company eventually and then as far as we can made a dish we could make a decision we have addressed.
Speaker Change: 101.5 billion worth of the air capacity and the rest of the 200.300 million will be addressed or sometimes sooner.
Speaker Change: One will be on a less a bit less than one really on either our production capacity and that is what we are going to aim and our we have done whatever we could do for the air and over the air physical Air This year and our EIS market has shrunk as.
Speaker Change: More than we expected and the NAV about it as a growing more than our expectations and also.
Speaker Change: Discounts.
Speaker Change: Competition.
Speaker Change: Discount competition is growing car.
Speaker Change: Continue our continual continual and then.
Speaker Change: 400000 to yen.
Speaker Change: <unk> of the actual selling prices because of the dish Collins practice today. Therefore, the commercial effort is a very difficult over there and going forward as of now.
Speaker Change: We have not decided there for Lee, but we will watch out the situations and then we'll make a decision and then of course, we have to watch out ice market I see a market going forward.
Speaker Change: Yeah.
Speaker Change: And.
Speaker Change:
Bev: So bev a dedicated to a platform.
Bev: Is being prepared food the air upcoming winter.
Speaker Change: And with that we will try to improve our presence in the market.
Speaker Change: We will try hurdles that are in conclusion.
Speaker Change: We.
Speaker Change: Explains are in the beginning about optimization of the capacity we are working on the resources and the EV.
Speaker Change: Part a will be more attractive products for <unk>, we are preparing for that June though the situation is tough.
Speaker Change: As we said are in the start of their fiscal year, we're going to do make our airports as we've explained it before and Forex as you mentioned earlier.
Speaker Change: 140, and for the full year assumption.
Speaker Change: We thought it would be a very conservative assumption as well so much that people said however in retrospect in the Golden week holiday period, we had a swing to the yen depreciation.
Speaker Change: And and we used 840 and with a 145 and 135 you're in for a dollar in the air first half and second half.
Speaker Change: Speculatively and now.
Speaker Change: The prices approaching 245, as we anticipated and the practically speaking in the first quarter Press conference like today.
Speaker Change: We discussion and thought we could say the air I forgot for cash that could be said 445 is we would disclose whether now we had a 220 yen down already in July and last week, our own words, we've had a 110 year difference isn't.
Speaker Change: Already.
Speaker Change: And now at not just dollars a bed, including diversions.
Speaker Change: Emerging market currencies are the Forex is.
Speaker Change: We're going to be more difficult to handle and rhythm for the 535 or I first and second half split.
Gary: That ratio something Gary the situation is actually.
Speaker Change: Realizing itself and then we decided to eventually that we could keep the our previous guidance.
Speaker Change: Yes.
Speaker Change: Our staff made great efforts are truly tragic keep it that way.
Speaker Change: I'm thankful for their efforts to budge.
Speaker Change: Today, the currency is around 145 yen going forward, we don't know as second half 135 yen I noticed sure if that is a.
Speaker Change: Good enough to contain the yen depreciation potential about in the first quarter as of July we have the yen depreciation and then 12 yen effect for a four month period of three years for one month, let's say and then if that goes that way maybe three years.
Speaker Change: Depreciation farther on.
Speaker Change: Based on this assumption and then we have about a 30 billion yen effect on our business for a dollar.
Speaker Change: Change of the currency and then.
Speaker Change: Again for this currency matters appear.
Speaker Change: People is to produce the Arab production, where the air the magic that exist there.
Speaker Change: Therefore, apart from those currency and money matters.
Speaker Change: We always are fine to add the place where they crashed breakfast and there is the place for activities of our production and sales and then we can earn money and then we can reinvest the money earned they're in the same place.
Speaker Change: Again for the investments with this way.
Honda: Honda can become a the growing company are growing the market locally too and that is our principal since our founding board founding time and the eventually we found that a we have a very good foreign currency toughness as to say thanks to that.
Speaker Change: Principal but now.
Speaker Change: A question also pointed to the ore stock market fluctuation badge.
Speaker Change: I'm afraid I might win that goes has some impact on the air.
Speaker Change: Actual economy, and then leading to a more.
Speaker Change: And the Iot kind of a mindset for the air Parachute batch in the motorcycle business is we have our <unk> business is an area where the volatilities are really high therefore, we have been toughening up our structure. So that we can.
Speaker Change: Bringing down the breakeven points are to be <unk>.
Speaker Change: Our religious planned to enter tough.
Speaker Change: Against such a fluctuation in the market.
Speaker Change: Or is this just you have to be made that way and also if the financial situation in the market.
Speaker Change: The changes are.
Speaker Change: We have a finance businesses that accounts for half of the balance sheet.
Speaker Change: But there's for instance, all the residue value losses, all the effort permanent situation.
Speaker Change: I think I confused so long if such things would happen that might impact or no operation. However.
Speaker Change: The residual values for instance.
Speaker Change: If we are.
Speaker Change: Yeah.
Speaker Change: Handle that too much it will disrupt our short term business operations. So that is not something we would do but we have a very of.
Speaker Change: Tough structure, a very stronger structure against financial fluctuation already.
Speaker Change: Ah.
Speaker Change: We have a heightened della resilience for the economy cause fluctuation as we've made our business structure to stand as such a fluctuation already so I think we can withstand a 10.
Speaker Change: However, 20 in fluctuation in month period will be a push a very tough situation. Although we believe that stability is good.
Speaker Change: However, we need to try to be equipped with the.
Speaker Change: Resilient and a tough business structure Ah.
Honda: Of Honda.
Speaker Change: Okay.
Speaker Change: Thank you very much Mr. Noguchi from on this next question.
Cheng Cheng: Cheng Cheng.
Cheng Cheng: Okay.
Speaker Change: Okay. The Schindler Mr. Oakey, neither thank you.
Speaker Change: And it gives them a macchiato squamous and working out how can we get in there can you hear me, yes, we hear you.
Speaker Change: Thank you very much.
Speaker Change: So my first question is regarding North American market.
Speaker Change: With the increase in interest rate.
Speaker Change: The our incentive has been raised by other companies and manufacturers and they're selling more units, however, theyre not in athene and more profit.
Speaker Change: What is the outlook of the business isn't growing.
Speaker Change: Please elaborate on that and my question number two that is regarding the partnership with Mitsubishi and than you thought.
Speaker Change: And that.
Speaker Change: The impact from that is not reflected in the business for now however.
Speaker Change: And there are any possibility of a productivity.
Timothy: But the Timothy a coming out from it that's tournament or would that be from next term award.
Timothy: Okay.
Speaker Change: Michelle can I got thank you very much for your question and her the North American market.
Speaker Change: Thank you was on all at all or we sell them as a measure noguchi.
Speaker Change: Mentioned earlier in his question.
Speaker Change: Okay.
Speaker Change: Now on.
Speaker Change: And due to the labor situation adds a while.
Speaker Change: I think their economy, a is declining slightly.
Speaker Change: And also the interest rate decline.
Speaker Change: Production will be happening in September by F. A b and D. A.
Speaker Change: She will be supported and self lending is also forecast that is a presumption those conditions will impact AD huge actuation and currently.
Speaker Change: We can say that our schedule our plan is going according to schedule.
Speaker Change: Quarter.
Speaker Change: That's where the market's at island actuation is that about the same as last year. However, as for our retail section that is a positive 1% back in June.
Speaker Change: The other manufacturers, who are impacted a little bit and our.
Speaker Change: Dealership embarrassment system, what I went through a cyber attack and we did have some impact as well at that and that has been resolved as well however, due to that impact than the first quarter.
Speaker Change: I know, Paul you know put us with that.
Paul: Additive and retail by a 10% <unk> 10, thousands of units was impacted by 1% so.
Speaker Change: As for the retail.
Speaker Change:
Speaker Change: And in Mexico. For example, we had a computer on in logistics so.
Speaker Change: There is actually an <unk>.
Speaker Change: At negative 20000 units. However, this can be recouped as well.
Speaker Change: What's leading them.
Speaker Change: Is high.
Brett: Hi, Brett.
Brett: Michael.
Brett: As for the hybrid vehicles.
Speaker Change: Such as CRV accord that Telus is going well.
Speaker Change: And since.
Brett: Do we have launched civic Hi, Brett.
Speaker Change: On top of that so because of that.
Speaker Change: Sure.
Speaker Change: Consolidated determined we are aiming for 430 units or beyond.
Speaker Change: And for example, CRB and accord hybrid that's 80%, whereas hybrid.
Speaker Change: And the demand is there however.
Speaker Change: Oh, we had considered a production capacity so it'll be harder for us to further increase our production. There. However, net from next term award.
Speaker Change: It'll take time, but we aim for increase our production capacity for those models.
Speaker Change: Sure the inventory.
Speaker Change: Other manufacturers are increasing and also their incentive level has gone back to the four corona level.
Speaker Change: However.
Speaker Change: And I have mentioned repeatedly since Corona era.
Speaker Change: Before corona or Covid.
Speaker Change: That inventory is Pandora to days or 60 days and we were in collaboration with our dealers and working with their inventory.
Speaker Change: And we decided to control the inventory situation based on 30 days instead.
Speaker Change: Due to the dealership system.
Speaker Change: The problem that I mentioned.
Speaker Change: It had some negative impact on the situation to however, excluding that we had been able to control based on 30 days, so azure incentive level ours is the lowest level and the industry.
Speaker Change: And we are spending some cash.
Speaker Change: Total August data.
Speaker Change: <unk> thousand $600.
Speaker Change: Acura.
Speaker Change: Having a hard time, but as the Honda overall, we have been able to limit that to our lowest level.
Speaker Change: Our assumption is two is for us to be able to go forward throughout the turn that this year.
Speaker Change: At the same level and that's what the partnership with Nissan and.
Speaker Change: Mitsubishi.
Speaker Change: I'm not.
Speaker Change: Positive about seeing any positive impact from that and that's termed as in me back.
Speaker Change: Mentioned and explained.
Speaker Change: Luke.
Speaker Change: We arent looking at D. R E D models coming in the future.
Speaker Change: Qunar Hawk Amit.
Michael: Michael Complementarity, a bottle that might happen, even after that but he thought were they both mens and investment those things we have been discussing so we're at a phase of M. O. Yale So it's not like we would see anything positive from this turn.
Speaker Change: That's it for me thank you very much.
Speaker Change: Okay.
Michelle: Thank you Michelle Kenai that.
Speaker Change: First of all this.
Speaker Change: Yomiuri Shimbun.
Speaker Change: Question, Mr. Nakamura from Yomiuri Shimbun newspaper, please turn on your microphone and the Camry. Please.
Speaker Change: Yeah.
Speaker Change: Twin workers Yoga can you hear me yes.
Speaker Change: Yes.
Nakamura: And Nakamura speaking from yearly Ooley newspaper and estimate your earlier.
Speaker Change: H K and generally just answered the question about.
Speaker Change: In the interest rate.
Speaker Change: Lack of Japan.
Speaker Change: Is voting today that they cannot raise the interest rate.
Speaker Change: If the budget is not really good and how do you take care of those.
Speaker Change: Policy and U S leverage ratio approach election today.
Speaker Change: Including your U S business shoes are what is your Apple cash throughout look about your businesses in the U S. A with regard to the election.
Speaker Change: Thank you very much Mr. Nakamura.
Speaker Change: Yes.
Speaker Change: So.
Speaker Change: Yes.
Speaker Change: Mr Chi the the air Vice President.
Speaker Change: President.
Speaker Change: Of the earn back of Japan, because of his statement are the market kind of stabilized or settle down in the way of that.
Speaker Change: We are not really looking for a very drastic changes that is almost a causing doses of a panic or reactions. It is not something we would wish of course.
Speaker Change: <unk>.
Speaker Change: Got it.
Speaker Change:
Speaker Change: If the market react with that sort of.
Speaker Change: Sure.
Speaker Change: Attitudes are in place with this good 155 yen was the level.
Speaker Change: From two weeks before or last week, even at the time, we thought that the interest rate hikes by the bank of Japan was already factored in.
Speaker Change: And of course.
Speaker Change: We were surprised after all and to manage operations, especially a bit of surprise. However of course, we are subject to any changes.
Speaker Change: That could happen at any given time, and we will try to toughen up our business structure to be able to withstand however, if the changes are too dramatic eh and <unk>.
Speaker Change: <unk> past it is not easy to catch up of course.
Speaker Change: And the impact of the presidential election.
Speaker Change: I don't think it is appropriate to say who would win a then but based on the current situation in the United States.
Speaker Change: In Europe.
Speaker Change: Yes.
Speaker Change: Yes.
Speaker Change: Before the election presidential election things coming up already we've had a a V a marketed deal.
Speaker Change: I didn't state says.
Speaker Change: Ah.
Speaker Change: Stalling.
Speaker Change: Kind of a coming cheered by kind of a stagnant stage a and.
Speaker Change: And the used car prices of <unk> in the U S. A is are staying very low that means the EV uses the customers who bought a beach.
Speaker Change: Them.
Speaker Change: See that are the same type of the car. He they bolt are sold at a very cheap crises. They built they are bought a reach because a it is a rather they were kinds, but now the prices are not high.
Speaker Change: And are they don't bind the <unk> have a good.
Speaker Change: Value Azure or one of the assets they should own. So that then relate to the confidence in the air companies like ours, and we need to we want to respect our customers.
Speaker Change: Loyalty as well and that is something being impacted there may be and are in.
Speaker Change: In the presidential election questions you may like to.
Speaker Change: Here from US how we would take the regulations and so on going forward, Mr. Trump or the Republicans are would have a certain tendency for the air regulation matches and this is something you already know off so I'm not going to explain from myself today.
Speaker Change: But by 2028.
Speaker Change: Sure.
Speaker Change: No matter.
Speaker Change: About represents election 228, or so on our Amish are ambitious Amish are going over the longer perspective, 2000, 2035 or so.
Speaker Change: That is to try to resolve the social issues and those have to be handled in the threshed by the society of the Hull and we want to realize.
Speaker Change: Our targets are in the long run and we want to focus on such a long term target.
Speaker Change: Without.
Speaker Change: Being a disruptor today, then of course, our politics, our matters in some cases.
Speaker Change:
Speaker Change: However, those changes or impacts will be within a four year period of their tenure and then we will have to try to craft our AR business.
Speaker Change: Malnourishment a way so that we can.
Speaker Change: Go and reversed out the period. Thank you very much Mr. Luca Marotta with them on this next question.
Speaker Change: That's from the chicken Toyo ksi material clamor.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: It's not only auto auto Yodice no deaths.
Speaker Change: He has me.
Speaker Change: It seems that the connection it's not going well sound like we'd like to go for the next questionnaire.
Mr. Yokoyama: Your Grandma Eurosport Mr. Yokoyama. Thank you very much like most loyal Gilead Qs M. Yokoyama play Okay, I have two questions as well the first one.
Speaker Change: Okay.
Speaker Change: Regarding the consolidated outlook I would like to confirm something.
Speaker Change: So the profit progress.
Speaker Change: Seems like it's going well.
Speaker Change: On the <unk> based on their operation profit.
Speaker Change: As her motorcycles and automobiles.
Speaker Change: Mobile.
Speaker Change: Is that are you are not making any projection or change.
Speaker Change: And he said the risk and opportunities based on the Q.
Speaker Change: I was wondering why you did not change anything there.
Speaker Change: Maybe you were looking at the second half of the ear.
Speaker Change: And because you said you mentioned earlier that expenses are expected to increase in the second half Sir please elaborate on that question number two.
Speaker Change: Great.
Speaker Change: Regarding supplier support.
Mr. Yokoyama: The act incentive or a cost of shouldering a for the inflation against inflation, what kind of support our initiatives are in place. If you know him including figures and if you could elaborate on that that would be great. Thank you very much. Thank you Mr. Yokoyama.
Speaker Change: Yes.
Speaker Change: Uh huh.
Speaker Change: Question number two maybe cabbage, then can answer including concrete figures.
Speaker Change: <unk>.
Speaker Change: Financial results for the first quarter as our motors motorcycles, and four wheel drives or about automobiles, rather are both performing very well and our ads are at 9% of which is the highest level NMM has shrank.
Speaker Change: So our history.
Speaker Change: And antenna ended there is as some.
Speaker Change: Stations, there and also some problems in <unk> and that number but overall, we are seeing upward trend, Brazil, India, and Turkey are leading in that trend as for India G.
Speaker Change: Got somebody for Kuwait.
Speaker Change: Until July.
Speaker Change: Auto plus yeah, the top share sales.
Speaker Change: Has been achieved in the past four months.
Speaker Change: And for this month.
Speaker Change: They were aiming for.
Speaker Change: Achieving the first base so that's what's happening in India.
Speaker Change: And so each quarter.
Speaker Change: T 18th.
Speaker Change: Are there targets or they have achieved a 505 million apart can per quarter and they have achieved that so ed's going has shrunk and further consolidated era.
Speaker Change: It's still the first three months, so we want to monitor a little more however.
Speaker Change: We are expecting that they will surpass our $20 million.
Speaker Change: The only costs you must do off my Idaho.
Speaker Change: And as a bottler build so they were right.
Speaker Change: Centering on the head, it's going well and North America.
Speaker Change: And incentive increase is arrogant.
Speaker Change: And naturally there. However, we are only leveraging it as slightly after the price hike and pricing as well.
Speaker Change: We are going according to plan.
Speaker Change: The onset of this fiscal year.
Speaker Change: For each model, we have which obviously isn't going to what they might do it.
Speaker Change: We cannot increase their production capacity in North America any further.
Speaker Change: So it's not like a weekend addressed it much more in line and this area on the other hand Ali habit and China's.
Speaker Change: China's impact to add 220000 TNF.
Speaker Change: I'll get off.
Speaker Change: And we have a negative.
Speaker Change: Of a.
Speaker Change: Several hundred millions.
Speaker Change: Including automobile or.
Speaker Change: Motorcycles, rather be linked to recoup.
Speaker Change: It's done about you add the a negative of one trillion 4800.
Speaker Change: Our 48 million.
Speaker Change: Two our F for its corporate airports.
Speaker Change: Minor.
Speaker Change: And also.
Speaker Change: Our.
Speaker Change: Outlook for the M.
Speaker Change: And I'll echo in our commodity basket.
Speaker Change: The profit is also going down. Unfortunately, however, the our interest rates.
Speaker Change: Cheap.
Speaker Change: Page two shareholders at <unk>.
Speaker Change: A coffee and all.
Speaker Change: For the first quarter.
Speaker Change: Yeah tentative impact for that is seen on the corporate taxation system.
Speaker Change: We can offset.
Speaker Change: Our negativity to that and one trillion that we mentioned at the onset of the fiscal year or the Tan.
Speaker Change: To maintain that because this is only the first quarter.
Speaker Change: So the progress is going well and like I said theres some negativity from China. So from that perspective, you year on year.
Speaker Change: It looks like it's going well however, we do have to make more effort to maintain at a high level of that we are aiming for throughout the year.
Speaker Change: Gordon.
Gordon: I believe I answered both of your questions.
Mr. <unk>: Mr. <unk> will answer your question number two regarding that I'm thinking at a support for supplier.
Mr. <unk>: So basically of course, we have to have suppliers for their support in order for us to do our manufacturing activity in order to deliver our products to our customers.
Speaker Change: So of course, what E supplier has their own reasons and background for there before many of them. So we would like to collaborate well.
Speaker Change: Well and we are collaborating with E supplier in order for them to be able to perform well and there is also inflation impact including labor costs. There is some burden on the supplier some suppliers and if that's the case we.
Speaker Change: We're ready to help them.
Speaker Change: Especially last year, we had a semi conductor problem and our production was not stable with not only in Japan. However, in North America, where inflation is and.
Speaker Change: Quite significant we have been.
Speaker Change: Discussing with supplier.
Speaker Change: And we have been showed her impartially add their cost as well. So that is the current situation and the situation will continue on in a similar manner that's ear.
Speaker Change: And it is hard to forecast at the inflation trend, but much of the kindergarten, we cannot tell you a specific number but.
Speaker Change: Okay.
Speaker Change: Cost is reflecting such as tuition.
Speaker Change: And if for the first quarter.
Sheila: So Sheila.
Speaker Change: And again the documents that we shared with you today.
Speaker Change: There is a profit fluctuation of factors.
Speaker Change: Compared to the same period last year.
Speaker Change: And that there was a impact average selling price and a cost.
Speaker Change: Explain the ailment or material one document.
Speaker Change: Andrew.
Speaker Change: Sure.
Andrew: Appealing editor.
Nicola: There is there a common Nicola and aim your belly yen impact as I explained here.
Nicola: That said the impact of selling price it and it is slightly a positive impact. However argument that this is video Coca Cola skills.
Speaker Change: Market situation of <unk>.
Speaker Change: Materials.
Speaker Change: Including a muddle through and that has loosened a bit at ICR. So.
Speaker Change: Excluding that our coffee is almous Eden.
Speaker Change: Not much change is happening there.
Speaker Change: So the suppliers to grow up activity did counter inflation.
Speaker Change: We are supporting them and such an activity in the similar way as last year.
Speaker Change: Thank you very much.
Speaker Change: Your grandmother.
Speaker Change: Thank you, Mr Yokoyama, Virginia, where some on this.
Speaker Change: You know what you want from a euro score.
Speaker Change: Next question is the energy MA from Bloom piece.
Arnold: With the Marine that's why the squamous with whom Wanka energy must speaking can you hear me and thank you Arnold.
Arnold: So.
Speaker Change: Some of the answers until now.
Speaker Change: However, already our results my question better as a follow up question.
Speaker Change: Especially that's you don't change the air full ear for crashed.
Speaker Change: The Forex exchange of volatility is still high is that one of the reasons why you didn't change the forecast and are also U S presidential election related that question Mr. <unk>.
Speaker Change: Mr. Trump is back in the eye of the office.
Speaker Change: They say that they are going to an unknown.
Speaker Change: Have a set of regulations are that might affect on the U S excuse.
Speaker Change: Excuse me, our Japanese or Oh, you're Amazon, who has the air are likelier higher impact by the tariff increase.
Speaker Change: Well and are may be other companies might have to pass on a pass through those incremental tariff to the crises.
Speaker Change: That much kind of a luxury positively for the businesses Abdulle G. If you have a kind of a similar view please clarify.
Speaker Change: Clarify.
Speaker Change: Thank you very much Mr. In a G. MA. So are the reason why we didn't change the air operating profit forecast for the full year. The reason is a aker a run of the reason is our forex currency. She because it is a not a clear cut trend we see therefore.
Jim: We are it didn't change our outlook in the air Wishon around two weeks changes we could have to breakout this is Jim.
Speaker Change: For U S. Dollar and also we have other currencies involved who because we have a rather complicated geopolitical opponents of trade in transactions in different.
Speaker Change: Our regions are the cross transactional will be area of different currencies involved quite complicated are there for a change of the air for cached it within a three month.
Speaker Change: Situational lumpy really justified with larger than them.
Speaker Change: We have others that when businesses are at ratio businesses right.
Speaker Change: And are quite a few of those can be or are being going on.
Speaker Change: In line with our expectations are like a Chinese won the equity based businesses for instance, however, your question is operating profit related right.
Speaker Change: So the forecast of the old P.
Speaker Change: With regard to the air Chinese impact.
Speaker Change:
Speaker Change: The air a Honda motor with Sheba are royalty money from the air parent company in China, and we send our kg partial components to China, as well, where we engage us in profit as well that are where we have a less a fewer number of the air vehicles in China, we would have an impact.
Speaker Change: A it will be like her.
Speaker Change: Yeah.
Speaker Change: What are the lows of a some tens of billions of yen to the impact. However, a one point a two four trillion yen of Oh gosh, there's still stands because we could absorb such impact with some airports as Phil and again a presidential election.
Speaker Change: Got it.
Speaker Change: In the previous the Trump administration are we had a U S. M C. A level that we had a tariff.
Speaker Change: Inflation, there, we still have an impact by that even today a relation to the Mexico.
Speaker Change: And as she is involved wins are the in fact still.
Speaker Change: As is our in place. So we don't know what sort of a regulations are they would impose a for instance, a local content ratio that may be one of the best area. However, we need to know the details about what is coming up.
Speaker Change: And then conversion a CPU complete the complete unit.
Speaker Change: A we don't have a.
Speaker Change: Big Air Potions of a CPU transactions.
Speaker Change: However, what is the air impact on that that's another question because.
Speaker Change: We danced says no we don't center too many C be used from the U S or from Asia to the U S.
Speaker Change: Uh huh.
Speaker Change: So depending on the origin and the destination of others Cpus impact would be a variable and from Canada to U S from Mexico to the U S. Another route.
Speaker Change: Ah the U S headquarters.
Speaker Change: However, like a tree a country or a tree, a patchy trading or a which is a sort of complementary to each other.
Speaker Change: And it.
Speaker Change: It might have some impact, but we could try to sustain our business and Jeff from Mexico to America <unk>.
Speaker Change: Maybe less.
Speaker Change: A batch are attuned that pumps that are without details are.
Speaker Change: Known to us it is very difficult to explain.
Speaker Change: Thank you very much.
Speaker Change: Judging from our audio towards I rushed up thank you.
Speaker Change: More targeted with my finger stick on nuclear power sites due to time constraints that next question will be the last one.
Speaker Change: It's probably going to watch them all.
Speaker Change: The last question I mean story from a euro score.
Speaker Change: <unk> two dose regimen mediatory Mr military please.
Speaker Change: You can lose a single moment.
Speaker Change: With your admitted Terry you might have kind of ashamed can you hear me, yes, we hear you.
Speaker Change: Thank you.
Speaker Change: I have two questions regarding hybrid models.
Speaker Change: First one is regarding the last page on the Powerpoint.
Speaker Change: The progress at <unk>.
Speaker Change: Our salads.
Speaker Change: Is there I believe it sounds like an aetna number.
Brett: Hi, Brett how is the units it looks like it's increasing you said, it's going well in North America and overall there is a reason for a healthy unit reduction actually so can you. Please elaborate on that and also the second question is related that's adds well be over our sales or is it going.
Speaker Change: Not so well in China. So what is the positioning of H E Z in China Toyota is enhancing a T V in a China and India.
Speaker Change: They're trying to.
Speaker Change: Improve the station even further so how are you going to deal with a H E V a positioning in China.
Speaker Change: Alright.
Ms Ambulatory: Thank you Ms ambulatory.
Ms Ambulatory: Took the hybrid it twofold I assure that there with units of a T V.
Ms Ambulatory: In China.
Speaker Change: Is in general.
Speaker Change: At the visual content together.
Speaker Change: The 5% reduction.
Speaker Change: In the passenger car category and all is what's being plant.
Speaker Change: The change in that category of go lives, including hybrid.
Speaker Change: We have seen a 30% reduction in eye, including hybrid.
Speaker Change: And on the contrary in leather is increasing.
Speaker Change: The hybrid included an eye to ensure seamless.
Speaker Change: Is decreasing in China slightly.
Speaker Change: Last year it was 60000.
Speaker Change: Now, it's less than half of that.
Speaker Change: So that's impacting that impact from China situation.
Speaker Change: Take two is currently in that and Chinese and factors.
Speaker Change: Theyre a T V for this quarter about 50% an increase of almost eight observatory uno compared to last year.
Speaker Change: Sure.
Speaker Change: How it's going.
Speaker Change: In China, we had you still monitor but as we mentioned at the onset of the Tan.
Speaker Change: And last yeah, a global model of a hybrid at 800000, we are aiming for.
Speaker Change: A million this year that is our plan correctly.
Speaker Change: <unk> Sir.
Speaker Change: Their production our unit sales and higher China is going down at the moment. So we are still struggling in that area.
Speaker Change: These range demo, but either way.
Speaker Change: Got it.
Speaker Change: Yeah.
Speaker Change: The one that's here.
Speaker Change: Our target is to increase the production volume of two 1 million.
Speaker Change: Inc.
Speaker Change: The ice a presence including hybrid in some way or another we are going to have to support.
Speaker Change: So in China.
Speaker Change: Sure.
Speaker Change: Gotcha.
Speaker Change: As market is struggling although do we have to consider how cute fight and as such circumstances.
Speaker Change: With an eye.
Speaker Change: The segment SUV and losses, you're old enough for example.
Speaker Change: We aren't losing and ice market as well with those models. So we also had to make effort in such categories as well.
Speaker Change: Either way.
Speaker Change: As I mentioned earlier on top of that.
Speaker Change: That battery EV.
Speaker Change: Put it that way.
Speaker Change: Exclusive platform.
Speaker Change: Is what we are.
Speaker Change: Planning for and have her full fledged production in China.
Speaker Change: Those models, so we will be focusing on in that category.
Speaker Change: And does that answer your question.
Speaker Change: Okay.
Mr military: Thank you Mr military.
Speaker Change: So to do a Korean won that concludes our financial without breathing differentiator on the financial results materials are available on our company website. Please refer to them.
Speaker Change: Thank you everyone for your participation.