Automobiles are vehicles with four wheels, a steering wheel, and a front seat for the driver. They can have several passengers. Cars are also typically equipped with seats for cargo. Most minivans can be converted to have more cargo space. There are some exceptions. For example, cars with permanently removed back seats no longer count as automobiles.
Depending on how you define it, motorcycles can fall under the automobiles category, but many people don’t know this. In fact, most definitions of cars say that they’re motor vehicles, but they don’t actually state how many passengers they can accommodate. Generally, you’ll see “4 wheels,” though some definitions will specify one to eight. It is important to keep this in mind, because motorcycles can get away with having just two wheels, and they are not as restricted as other vehicles.
The term “motorcycle” has been used interchangeably with the term “automobile,” and it is important to understand the distinction. Motorcycles are self-propelled machines, while cars are primarily a vehicle for transporting people. While cars are more practical for heavy traffic, motorcycles are better suited for light traffic.
One of the key areas of Honda’s business is its motorcycle division. A large percentage of its sales come from this segment, and it remains the company’s most profitable segment. Currently, Honda sells a majority of its motorcycles in North America and Asia. However, the company is looking to expand its footprint in Latin America and Africa.
According to the company, it has strong presences in Brazil and India, and is targeting parts of Africa. While there is uncertainty about the potential for expansion into Africa, it’s not surprising to see the company focus on the region. Some Chinese brands have a foothold in the African market, too.
Honda’s main challenge is to improve its mix of light, medium, and sport-utility vehicles in the global market. Honda is also pursuing new technologies, such as autonomous driving. Investing in R&D may help to address this challenge. As a result, Honda’s net cash balance continues to grow. Although the company has low ASPs for its current model lineup, the management believes that margins will improve over time.
While the Asian economic crisis of the late 1990s slowed down auto production, the situation improved slightly in 1999. During that period, sales increased by 175,000 units. This was primarily due to government subsidies, low interest rates, and pent-up demand.
Despite the economic challenges, the automotive industry is growing. Vehicle ownership is increasing by 5-10 percent annually. The increase in ownership is driven by the growth of middle class, and is an indication that the economy is improving. EVs will likely dilute the automakers’ sales mix, but the company’s management has confidence that the margins will improve.
Overall, the company has a solid balance sheet, and its underlying net cash balance of $2,093 billion for the FY3/2020 period is on the rise. Honda’s free cash flow has been positive for the past five years. Management expects Honda’s overall business to continue to grow, with continued profitability in its motorcycle segment. And the company has begun to boost its quarterly dividend payments to reflect the improving conditions in the business.