Automotive Manufacturing in the UK

8/2/2019 Automotive Manufacturing in the UK

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United Kingdom - Automotive Manufacturing 0183 - 2606 - 2010

Datamonitor. This profile is a licensed product and is not to be photocopied Page 1

INDUSTRY PROFILE

Automotive Manufacturingin

the United Kingdom

Reference Code: 0183-2606

Publication Date: May 2011


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EXECUTIVE SUMMARY



EXECUTIVE SUMMARY

Market value

The United Kingdom automotive manufacturing industry grew by 27.8% in 2010 to reach a value of $16.7billion.

Market value forecast

In 2015, the United Kingdom automotive manufacturing industry is forecast to have a value of $25.5

billion, an increase of 52.7% since 2010.

Market volume

The United Kingdom automotive manufacturing industry grew by 26.4% in 2010 to reach a volume of 1.4

million units.

Market volume forecast

In 2015, the United Kingdom automotive manufacturing industry is forecast to have a volume of 1.9

million units, an increase of 36.4% since 2010.

Market segmentation I

Cars is the largest segment of the automotive manufacturing industry in the United Kingdom, accounting

for 82.8% of the industry's total value.

Market segmentation II

The United Kingdom accounts for 5.6% of the European automotive manufacturing industry value.

Market rivalry

The UK automotive industry was severely affected by the economic downturn, with a decline in revenues

being recorded in 2008 and 2009. However, 2010 saw a strong rebound with revenues growing for the

first time since 2007.


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CONTENTS



TABLE OF CONTENTS

EXECUTIVE SUMMARY 2

MARKET OVERVIEW 7

Market definition 7

Research highlights 8

Market analysis 9

MARKET VALUE 10

MARKET VOLUME 11

MARKET SEGMENTATION I 12

MARKET SEGMENTATION II 13

FIVE FORCES ANALYSIS 14

Summary 14

Buyer power 15

Supplier power 16

New entrants 17

Substitutes 18

Rivalry 19

LEADING COMPANIES 20

Ford Motor Company 20

Honda Motor Co., Ltd. 24

Toyota Motor Corporation 29

MARKET FORECASTS 33

Market value forecast 33

Market volume forecast 34

MACROECONOMIC INDICATORS 35

APPENDIX 37

Methodology 37

Industry associations 38

Related Datamonitor research 38


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CONTENTS



Disclaimer 39

ABOUT DATAMONITOR 40

Premium Reports 40

Summary Reports 40

Datamonitor consulting 40


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CONTENTS



LIST OF TABLES

Table 1: United Kingdom automotive manufacturing industry value: $ billion, 200610 10

Table 2: United Kingdom automotive manufacturing industry volume: million units, 200610 11

Table 3: United Kingdom automotive manufacturing industry segmentation I:% share, by value,

2010 12

Table 4: United Kingdom automotive manufacturing industry segmentation II: % share, by value,

2010 13

Table 5: Ford Motor Company: key facts 20

Table 6: Ford Motor Company: key financials ($) 22

Table 7: Ford Motor Company: key financial ratios 22

Table 8: Honda Motor Co., Ltd.: key facts 24

Table 9:

Honda Motor Co., Ltd.: key financials ($) 26

Table 10: Honda Motor Co., Ltd.: key financials () 26

Table 11: Honda Motor Co., Ltd.: key financial ratios 27

Table 12: Toyota Motor Corporation: key facts 29

Table 13: Toyota Motor Corporation: key financials ($) 31

Table 14: Toyota Motor Corporation: key financials () 31

Table 15: Toyota Motor Corporation: key financial ratios 31

Table 16: United Kingdom automotive manufacturing industry value forecast: $ billion, 201015 33

Table 17: United Kingdom automotive manufacturing industry volume forecast: million units,

201015 34

Table 18: United Kingdom size of population (million), 200610 35

Table 19: United Kingdom gdp (constant 2000 prices, $ billion), 200610 35

Table 20: United Kingdom gdp (current prices, $ billion), 200610 35

Table 21: United Kingdom inflation, 200610 36

Table 22: United Kingdom consumer price index (absolute), 200610 36

Table 23: United Kingdom exchange rate, 200610 36


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CONTENTS



LIST OF FIGURES

Figure 1: United Kingdom automotive manufacturing industry value: $ billion, 200610 10

Figure 2: United Kingdom automotive manufacturing industry volume: million units, 200610 11

Figure 3: United Kingdom automotive manufacturing industry segmentation I:% share, by value,

2010 12

Figure 4: United Kingdom automotive manufacturing industry segmentation II: % share, by value,

2010 13

Figure 5: Forces driving competition in the automotive manufacturing industry in the United

Kingdom, 2010 14

Figure 6: Drivers of buyer power in the automotive manufacturing industry in the United Kingdom,

2010 15

Figure 7:

Drivers of supplier power in the automotive manufacturing industry in the UnitedKingdom, 2010 16

Figure 8: Factors influencing the likelihood of new entrants in the automotive manufacturing

industry in the United Kingdom, 2010 17

Figure 9: Factors influencing the threat of substitutes in the automotive manufacturing industry in

the United Kingdom, 2010 18

Figure 10: Drivers of degree of rivalry in the automotive manufacturing industry in the United

Kingdom, 2010 19

Figure 11: Ford Motor Company: revenues & profitability 23

Figure 12:

Ford Motor Company: assets & liabilities 23

Figure 13: Honda Motor Co., Ltd.: revenues & profitability 27

Figure 14: Honda Motor Co., Ltd.: assets & liabilities 28

Figure 15: Toyota Motor Corporation: revenues & profitability 32

Figure 16: Toyota Motor Corporation: assets & liabilities 32

Figure 17: United Kingdom automotive manufacturing industry value forecast: $ billion, 201015 33

Figure 18: United Kingdom automotive manufacturing industry volume forecast: million units,

201015 34


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MARKET OVERVIEW



MARKET OVERVIEW

Market definition

The automotive manufacturing industry comprises of the production of trucks, passengers cars andmotorcycles. The truck manufacturers market comprises of the production of light commercial vehicles

(LCVs), heavy trucks, and buses & coaches. LCVs weigh up to 7 tons, heavy trucks weigh greater than 7

tons, and buses & coaches weigh greater than 7 tons. Sports utility vehicles and similar vehicles are not

included. T Passenger cars are defined as motor vehicles with at least four wheels, used for the transport

of passengers, and comprising no more than eight seats in addition to the driver's seat. Motorcycle

manufacturers are producers of powered two-wheelers (PTWs) that are available to the public. All

designs and engine capacities, including low-powered bikes referred to as mopeds, are included as well

as on-road (street legal), racetrack only and off-road motorcycles. The automotive manufacturing industry

value is calculated in terms of manufacturer selling price (MSP), and excludes all taxes and levies. All

currency conversions are at constant average annual 2010 exchange rates.

For the purposes of this report, Europe consists of Western Europe and Eastern Europe.

Western Europe comprises Belgium, Denmark, France, Germany, Greece, Italy, the Netherlands,

Norway, Spain, Sweden, Switzerland, Turkey, and the United Kingdom.

Eastern Europe comprises the Czech Republic, Hungary, Poland, Romania, Russia, and Ukraine.


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MARKET OVERVIEW



Research highlights

The UK automotive manufacturing industry generated total revenue of $16.7 billion in 2010, representing

a compound annual rate of change (CARC) of -3.3% between 2006 and 2010.

Industry production volumes decreased with a CARC of -4.5% between 2006 and 2010, to reach a total of

1,406.4 thousand units in 2010.

The performance of the industry is forecast to accelerate, with an anticipated CAGR of 8.9% for the five-

year period 2010 - 2015, which is expected to drive the industry to a value of $25.5 billion by the end of

2015.


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MARKET OVERVIEW



Market analysis

The UK automotive manufacturing industry suffered market declines in 2008 and 2009, as the effects of

the recession were felt. The market gained momentum in 2010 and is expected to sustain this recovery

over the course of the forecast period, posting strong growth up to and including 2015

The UK automotive manufacturing industry generated total revenue of $16.7 billion in 2010, representing

a compound annual rate of change (CARC) of -3.3% between 2006 and 2010. In comparison, the French

industry declined with a CARC of -7.3%, while the German industry grew with a CAGR of 2.3%, over the

same period, to reach respective values of $32 billion and $112.6 billion in 2010.

Industry production volumes are forecast to decrease with a CARC of -4.5% between 2006 and 2010, to

reach a total of 1,406.4 thousand units in 2010. The industry's volume is expected to rise to 1,917.8

thousand units by the end of 2015, representing a CAGR of 6.4% for the 2010-2015 period.

The Cars segment was the industry's most lucrative in 2010, with total revenue of $13.8 billion, equivalent

to 82.8% of the industry's overall value. The Trucks segment contributed revenue of $2.6 billion in 2010,equating to 15.9% of the industry's aggregate value.

The performance of the industry is forecast to accelerate, with an anticipated CAGR of 8.9% for the five-

year period 2010 - 2015, which is expected to drive the industry to a value of $25.5 billion by the end of

2015. Comparatively, the French and German industries will grow with CAGRs of 5.8% and 2.8%

respectively, over the same period, to reach respective values of $42.4 billion and $129.6 billion in 2015.


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MARKET VALUE



MARKET VALUE

The United Kingdom automotive manufacturing industry grew by 27.8% in 2010 to reach a value of $16.7

billion.

The compound annual rate of change of the industry in the period 200610 was -3.3%.

Table 1: United Kingdom automotive manufacturing industry value: $ billion, 200610

Year $ billion billion billion % Growth

2006 19.1 12.4 14.4

2007 21.0 13.6 15.8 10.0%

2008 20.3 13.1 15.3 (3.4%)

2009 13.0 8.4 9.8 (35.7%)

2010 16.7 10.8 12.6 27.8%

CAGR: 200610 (3.3%)

Source: Datamonitor D A T A M O N I T O R

Figure 1: United Kingdom automotive manufacturing industry value: $ billion, 200610



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MARKET VOLUME



MARKET VOLUME

The United Kingdom automotive manufacturing industry grew by 26.4% in 2010 to reach a volume of 1.4

million units.

The compound annual rate of change of the industry in the period 200610 was -4.5%.

Table 2: United Kingdom automotive manufacturing industry volume: million units, 200610

Year million units % Growth

2006 1.7

2007 1.8 5.6%

2008 1.7 (5.5%)

2009 1.1 (33.9%)

2010 1.4 26.4%

CAGR: 200610 (4.5%)


Figure 2: United Kingdom automotive manufacturing industry volume: million units, 200610



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MARKET SEGMENTATION I



MARKET SEGMENTATION I

Cars is the largest segment of the automotive manufacturing industry in the United Kingdom, accounting

for 82.8% of the industry's total value.

The trucks segment accounts for a further 15.9% of the industry.

Table 3: United Kingdom automotive manufacturing industry segmentation I:% share, by value,

2010

Category % Share

Cars 82.8%

Trucks 15.9%

Motorcycles 1.3%

Total 100%


Figure 3: United Kingdom automotive manufacturing industry segmentation I:% share, by value,

2010



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MARKET SEGMENTATION II



MARKET SEGMENTATION II

The United Kingdom accounts for 5.6% of the European automotive manufacturing industry value.

Germany accounts for a further 37.9% of the European industry.

Table 4: United Kingdom automotive manufacturing industry segmentation II: % share, by

value, 2010

Category % Share

Germany 37.9%

Spain 12.7%

France 10.8%

Italy 5.9%

United Kingdom 5.6%

Rest of Europe 27.0%

Total 100%


Figure 4: United Kingdom automotive manufacturing industry segmentation II: % share, by

value, 2010



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FIVE FORCES ANALYSIS




The automotive manufacturing market will be analyzed taking manufacturers of cars, trucks and

motorcycles as players. The key buyers will be taken as car, truck and motorcycle dealerships, and

manufacturers of raw materials and ready made components as the key suppliers.

Summary

Figure 5: Forces driving competition in the automotive manufacturing industry in the United

Kingdom, 2010


The UK automotive industry was severely affected by the economic downturn, with a decline in revenues

being recorded in 2008 and 2009. However, 2010 saw a strong rebound with revenues growing for the

first time since 2007.

Buyer power in this industry is weakened by the high switching costs faced by dealerships and customer

loyalty with respect to dominating brands. Amongst the suppliers there are providers of commodity items

such as metals, and their power is boosted due to their large size, consolidation of the industry and the

fact that automotive manufacturers account for only a small proportion of their revenues. For new entrantsto the industry, setting up a production facility involves large capital outlay thus constituting a significant

entry barrier and high fixed cost. Furthermore the global tightening of emission standards is ramping up

costs further. Substitutes present a moderate threat in the form of used vehicles and other modes of

transport. Rivalry is boosted by the presence of large, international incumbents.


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Buyer power

Figure 6: Drivers of buyer power in the automotive manufacturing industry in the United

Kingdom, 2010


Main buyers within this industry as a whole are dealerships. However, end-user pull-through is important.

Dealerships tend to have exclusive contractual agreements with manufacturers and as such switching

costs are very high. Manufacturers rarely sell end to end consumers and tend to use a dealership to

reach the end market. This strengthens buyer power to an extent as manufacturers are reliant on

dealerships. However, similarly dealerships are also highly dependent on manufacturers the product is

almost completely indispensible to them, which further undermines buyer power. This industry is

dominated by large international players such as Hyundai and Suzuki. This means that buyers within the

industry face a relatively low concentration of players, indicating a lower level of choice. However, the

concentration of the automotive industry varies significantly between countries and regions. There is a

relatively large number of buyers within the industry, which coupled with a high level of product

differentiation weakens buyer power further. Dealers are forced to sell brands and models preferred by

consumers, which tends to reduce the power even more. It is also unlikely for dealers to integrate

backwards into the manufacturers' operating area due to the different nature of the business, although it

should be noted that many of the dealerships are examples of the manufacturer forward integrating.

Overall, buyer power is assessed as relatively weak in this industry.


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Supplier power

Figure 7: Drivers of supplier power in the automotive manufacturing industry in the United

Kingdom, 2010


Key inputs required by automotive manufacturers are typically commodity items, such as metals and

more differentiated inputs like fabricated components. These items tend to be produced by other

companies rather than being manufactured in-house. Amongst the providers, there are large, multi-

nationals with a strong presence within global markets which boosts their power. To ensure timely

delivery of such materials, market players often sign contracts with their providers, thus strengthening

their power. With fairly low differentiation of raw materials, there is often little to distinguish between some

suppliers, which reduces supplier power. However, the importance of high quality raw materials and

components to manufacturers (particularly in relation to safety concerns) can increase supplier power.

Typical suppliers are likely to sell to a wide variety of manufacturing companies, with the automotive

market likely to be contributing only a small share of total supplier revenues. This further strengthens the

position of suppliers. Overall, supplier power is moderate.


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New entrants

Figure 8: Factors influencing the likelihood of new entrants in the automotive manufacturing

industry in the United Kingdom, 2010


Brand strength and reputation are highly important in the automotive manufacture industry, and it is

therefore quite difficult for new players to directly enter a particular country's market. Those that succeed

often do so through the introduction of successful foreign brands. Setting up a production facility involves

large capital outlay thus constituting a significant entry barrier and resulting in high fixed costs.

Additionally, leading automotive brands such as Ford and Volkswagen enjoy an exceptionally high level of

brand recognition, which is reflected in their high sales volumes and market dominance. Due to the

existing strength of such brands it is difficult for new entrants to introduce their products into the market.

However, sales are sometimes sensitive to price and it may be possible for manufacturers to enter

markets through the sale of budget vehicles. For example, the Chinese Qianjiang group has had a high

degree of success entering European markets with the sale of its Keeway brand of budget motorcycles.

Furthermore, the global tightening of emission standards is ramping up costs further as automotive re-

designs are required to conform to new emissions laws. Such a trend can trigger the demand for newer,

more economical engines, involving higher costs of R&D spending. The EU has some of the strongest

emissions guidelines having adopted Euro V in 2010. Currently member states are not allowed to sell

vehicles that do not meet the standards. The global economic downturn impacted this industry heavily in

2008 and 2009 with a sharp fall in revenues recorded. However, the industry appears to be recovering

well. Overall, the likelihood of new entrants to this industry is assessed as weak.


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Substitutes

Figure 9: Factors influencing the threat of substitutes in the automotive manufacturing industry

in the United Kingdom, 2010


The main substitute threatening players in this industry is used vehicles. Dealerships which sell both new

and used vehicles are likely to have sold more of the latter during the global economic downturn as

consumers avoid making big purchases, e.g. new cars. On the other hand, new emission standards,

together with technological solutions, may lead to a situation where it may be more economical in the long

run (e.g. in terms of tax, fuel costs etc.) to purchase a new vehicle. A further substitute is alternative

modes of transport. For example, consumers may use public transport as opposed to having a personal

vehicle, or businesses may choose road or rail transport for goods as opposed to owning a truck. Overall,

the threat of substitutes is moderate.


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Rivalry

Figure 10: Drivers of degree of rivalry in the automotive manufacturing industry in the United

Kingdom, 2010


The automotive manufacturing market consists of a relatively small number of large-scale companies.

The market is fairly consolidated, as companies have looked to increase their market share in the face of

limited growth in large but mature markets, e.g. Western Europe. Rivalry is slightly reduced due to a

degree of differentiation, with several different segments within the industry, for example luxury vehicles

and budget vehicles. Fixed costs and exit barriers are of significant meaning within this industry and

leaving it requires substantial divestment of highly specific assets. Companies utilize a high level of

design and marketing to promote their product. Some companies occupy more than one segment by

utilizing different brands, for example Fiat (Fiat and Ferrari) and BMW (BMW and Mini). The automotive

market was one of the most severely hit by the global economic downturn, with automotive manufacturers

experiencing record losses, culminating in General Motors and Chrysler having to file for bankruptcy in

2009. It should be noted however, that the industry is showing good signs of recovery. Overall, rivalry

within this industry is assessed as strong.


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LEADING COMPANIES



LEADING COMPANIES

Ford Motor Company

Table 5: Ford Motor Company: key facts

Head office: One American Road, Suite 1026, Dearborn, Michigan 48126, USA

Telephone: 1 313 845 8540

Fax: 1 313 845 6073

Local office: Ford Motor Co Ltd, PO Box 10726, Brentwood, CM14 9HE, GBR

Website: www.ford.com

Financial year-end: December

Ticker: F

Stock exchange: New York

Source: company website D A T A M O N I T O R

Ford Motor Company (Ford) is one of the largest automotive manufacturers in the world. The company

manufactures and distributes automobiles across six continents. With 80 manufacturing facilities

worldwide, the company's core and affiliated automotive brands include Ford, Lincoln, Mercury and Volvo.

The company conducts its business through two divisions: automotive and financial services. Within these

divisions, Ford's automotive business is further classified into reportable segments based upon its

geographical and organizational structure.

The automotive business division consists of the design, development, manufacture, sale and service of

cars, trucks and service parts. Through this division, Ford produces a wide range of vehicles including

cars for the small, medium, large and premium segments; trucks; buses/vans (including minivans); full-

size pickups; sport utility vehicles (SUV) and vehicles for the medium/heavy segments. In FY2009, the

company sold approximately 4.8 million vehicles at wholesale throughout the world. The company's

automotive business is organized into the following segments: Ford North America, Ford South America,

Ford Europe, Ford Asia Pacific and Africa, and Volvo.

The Ford North America segment primarily includes the sale of Ford, Lincoln and Mercury brand vehicles

and related service parts in North America (the US, Canada and Mexico), together with the associated

costs to design, develop, manufacture and service these vehicles and parts. This segment also included

the sale of Mazda6 vehicles through its consolidated subsidiary, AutoAlliance International (AAI). This

business was sold in January 2010.


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LEADING COMPANIES



The Ford South America and Ford Europe segment includes primarily the sale of Ford brand vehicles and

related service parts in South America and in Europe (including all parts of Turkey and Russia),

respectively. Ford Asia Pacific and Africa segment primarily includes the sale of Ford-brand vehicles and

related service parts in the Asia Pacific region and South Africa. The Volvo segment includes primarily the

sale of Volvo brand vehicles and related service parts throughout the world (including in North America,

South America, Europe, Asia Pacific, and Africa).

In addition to producing and selling cars and trucks, Ford also provides a range of after sales services

and products through its dealer network. In addition to the products that are sold to dealers for retail sale,

Ford also sells cars and trucks to its dealers for sale to fleet customers, including daily rental car

companies, commercial fleet customers, leasing companies and governments. The company provides

services such as maintenance and light repair, heavy repair, collision, vehicle accessories and extended

service warranty. In North America, the company markets these products and services under several

brands, including Genuine Ford and Lincoln-Mercury Parts and Service, Ford Custom Accessories, Ford

Extended Service Plan, and Motorcraft. At the end of December 2009, the number of dealershipsdistributing Ford's vehicle brands worldwide was approximately 17.1 thousand (including 11.6 thousand

for Ford, 2.2 thousand for Volvo, 1.7 thousand for Mercury, and 1.4 thousand for Lincoln).

The financial services division operates through the company subsidiary, Ford Motor Credit (Ford Credit).

Ford Credit offers a wide variety of automotive financing products to, and through automotive dealers

throughout the world. The predominant share of Ford Credit's business consists of financing Ford

vehicles and supporting the company's dealers. Ford Credit's primary financial products fall into three

categories: retail financing, wholesale financing, and other financing.

Ford Credit also services the finance receivables and leases that it originates and purchases, makes

loans to affiliates, purchases receivables from company subsidiaries, and provides selected insurance

services. Ford Credit's revenues are earned primarily from payments made under retail installment sale

contracts and retail leases, and from payments made under wholesale and other dealer loan financing

programs. Ford Credit does business in all states in the US and in all provinces in Canada through

automotive dealer financing branches and regional business centers. Outside US, FCE Bank (FCE) is

Ford Credit's largest operation. FCE's primary business is to support the sale of Ford's vehicles in Europe

through its dealer network. FCE offers a variety of retail, leasing and wholesale finance plans in most

countries in which it operates; FCE does business in the UK, Germany and most other European

countries. Ford Credit, through its subsidiaries, also operates in the Asia Pacific and Latin American

regions. In addition, FCE, through its worldwide trade financing division, provides financing to dealers in

countries where typically Ford has no established local presence.

Led by the Fiesta, Focus and Ka, Ford strengthened its position as Europes second highest-selling brand

in 2009. Ford Europes market share of 9.1% was a half point increase for the year and set an 11-year

high.


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LEADING COMPANIES



Key Metrics

The company recorded revenues of $118,308 million in the fiscal year ending December 2009, a

decrease of 19.1% compared to fiscal 2008. Its net income was $2,717 million in fiscal 2009, compared to

a net loss of $14,672 million in the preceding year.

The volume of units sold in Fords Europe segment in 2009 amounted to 1.5 million. This represents a

percentage change of -13.8% on the previous years figure of 1.8 million.

Table 6: Ford Motor Company: key financials ($)

$ million 2005 2006 2007 2008 2009

Revenues 176,835.0 160,065.0 172,455.0 146,277.0 118,308.0

Net income (loss) 1,440.0 (12,613.0) (2,723.0) (14,672.0) 2,717.0Total assets 275,936.0 279,196.0 279,264.0 218,328.0 194,850.0

Total liabilities 262,494.0 281,502.0 272,215.0 235,639.0 201,365.0

Employees 300,000 283,000 224,000 213,000 176,000

Source: company filings D A T A M O N I T O R

Table 7: Ford Motor Company: key financial ratios

Ratio 2005 2006 2007 2008 2009

Profit margin 0.8% (7.9%) (1.6%) (10.0%) 2.3%

Revenue growth 2.6% (9.5%) 7.7% (15.2%) (19.1%)

Asset growth (7.9%) 1.2% 0.0% (21.8%) (10.8%)

Liabilities growth (7.0%) 7.2% (3.3%) (13.4%) (14.5%)

Debt/asset ratio 95.1% 100.8% 97.5% 107.9% 103.3%

Return on assets 0.5% (4.5%) (1.0%) (5.9%) 1.3%

Revenue per employee $589,450 $565,601 $769,888 $686,746 $672,205

Profit per employee $4,800 ($44,569) ($12,156) ($68,883) $15,438



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LEADING COMPANIES



Figure 11: Ford Motor Company: revenues & profitability


Figure 12: Ford Motor Company: assets & liabilities



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LEADING COMPANIES



Honda Motor Co., Ltd.

Table 8: Honda Motor Co., Ltd.: key facts

Head office: 1-1, 2-chome, Minami-Aoyama Minato-ku, Tokyo, 107-8556, JPN

Telephone: 81 3 3423 1111

Fax: 81 3 5412 1515

Local office: Honda Motor Europe Ltd, 470 London Road, Slough, Berkshire, SL38QY, GBR

Telephone: 44 01753 590590

Fax: 44 01753 590000

Website: world.honda.com

Financial year-end: March

Ticker: HMC; 7267

Stock exchange: New York; Tokyo


Honda Motor Company Limited (Honda) is one of the leading manufacturers of automobiles and the

largest manufacturer of motorcycles in the world. The company also provides a range of financial services

to its customers and dealers. The company has a total of 396 subsidiaries and 105 affiliates all over the

world.

The company operates through four business divisions: automobile, motorcycle, financial services, and

power products and others.

The automobiles business division manufactures passenger cars, multi-wagons, minivans, sport utility

vehicle, sports coupe, and mini vehicles. Honda's automobiles use gasoline engines of three, four or six-

cylinder powered, diesel engines, and gasoline-electric hybrid systems. The company also offers

alternative fuel-powered vehicles such as natural gas, ethanol, and fuel cell vehicles.

The company's popular passenger car models include Legend, Accord, Inspire, Civic, Insight, City, Acura

RL, Acura TL, Acura TSX, and Acura CSX. In the multi-wagons, minivans, sport utility vehicle, and sports

coupe segments, the popular models include Elysion, Odyssey, Step Wagon, Stream, FREED, Edix/FR-

V, Airwave, Fit/Jazz, Partner Pilot, Ridgeline, CR-V, Element, Crossroad, S2000, Acura MDX, and Acura

RDX. The mini cars are marketed under Life, Zest, Vamos, and Acty models.

Honda manufactures its automobiles at two sites in Japan: the Saitama factory and the Suzuka factory.

The company's other major production sites are located in the US (Ohio, Alabama, and Indiana), Canada

(Ontario), UK (Swindon), Thailand (Ayutthaya) India (Uttar Pradesh), and Brazil (Sao Paulo).


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LEADING COMPANIES



Yachiyo Industry Co, one of the company's consolidated subsidiaries, assembles Mini cars for the

Japanese domestic market.

In FY2009, the company recorded total sales of 3.5 million car units, as compared to unit sales of 3.9

million in FY2008. This represents a decrease of 10.4% compared to FY2008. Out of the total sales, the

company sold 556 thousand in Japan; 1.5 million in North America; 350 thousand in Europe; 793

thousand in Asia; and the remaining 322 thousand in other regions.

The motorcycle business division produces a range of motorcycles, from the 50 cc class to the 1800 cc

class cylinder displacement. Honda's motorcycle line consists of scooters, electric-motor-assisted

bicycles, sports bikes, and large touring cycles. The motorcycles use gasoline engines developed by the

company that are air or water cooled, two or four cycled, and single, two, four, or six cylinder powered.

Honda's motorcycles are produced at the Kumamoto factory in Japan. The company also produces its

motorcycles through its subsidiaries in Italy, Spain, Thailand, Vietnam, the Philippines, India, Brazil, and

Argentina.

In FY2009, the company recorded total sales of 10 million units of motorcycles, as compared to the unit

sales of 9.3 million in FY2008. This represents an increase of 8.5% over FY2008. Out of the total sales,

the company sold 232 thousand in Japan; 320 thousand in North America; 276 thousand in Europe; 7.5

million in Asia; and remaining 1.8 million in other regions.

With an aim of providing sales support for its products, Honda offers a variety of financial services to its

customers and dealers through finance subsidiaries in countries including Japan, the US, Canada, the

UK, Germany, Brazil, and Thailand. The services of these subsidiaries include retail lending, leasing to

customers, and other financial services, such as wholesale financing to dealers.

Honda's power products and other businesses division manufactures a range of power products including

power tillers, portable generators, general purpose engines, grass cutters, outboard marine engines,

water pumps, snow throwers, power carriers, power sprayers, lawn mowers, and lawn tractors (riding

lawn mowers). Honda also manufactures the major components and parts used in its products, including

engines, frames, and transmissions.

The company also makes engines for light business jets as well as automobile fuel cells. Honda also

manufactures ASIMO (humanoid robots), which can offer many useful functions such as greeting visitors

and informing personnel of the visitor's arrival by transmitting messages and pictures of the visitor's face,

and guide visitors to a predetermined location.

Concerning the economic environment surrounding Honda, economic conditions in the United States

showed moderate recovery, as evidenced by improvement in consumer spending, a bottoming out of

private capital investment and other developments, despite concerns about the continuation of the credit

contraction, deterioration in the employment situation and other factors.


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LEADING COMPANIES



The economies of Europe also bottomed out, despite concerns such as economic stagnation as a result

of the credit contraction, a sales slump following the end of measures supporting new car purchases and

a deterioration in employment conditions.

Key Metrics

The company recorded revenues of $97,681 million in the fiscal year ending March 2010, a decrease of

14.3% compared to fiscal 2009. Its net income was $6,081 million in fiscal 2010, compared to a net

income of $1,560 million in the preceding year.

Unit sales of motorcycles and automobiles for Europe in 2010 amounted to 448,000. This represents a

percentage change of -28.4% on the previous years figure of 626,000.

Table 9: Honda Motor Co., Ltd.: key financials ($)

$ million 2006 2007 2008 2009 2010

Revenues 112,810.3 126,235.3 136,661.6 113,985.8 97,680.6

Net income (loss) 6,797.3 6,743.8 6,831.9 1,559.9 6,081.0

Total assets 120,365.9 137,044.9 143,637.8 134,567.6 132,406.5


Employees 144,785 167,231 178,960 181,876 176,815


Table 10: Honda Motor Co., Ltd.: key financials ()

million 2006 2007 2008 2009 2010

Revenues 9,908,000.0 11,087,100.0 12,002,834.0

10,011,241.0

8,579,174.0

Net income (loss) 597,000.0 592,300.0 600,039.0 137,005.0 534,088.0

Total assets 10,571,600.0

12,036,500.0 12,615,543.0

11,818,917.0

11,629,115.0

Total liabilities 6,445,900.0 7,553,900.0 7,929,472.0 7,688,573.0 6,987,962.0



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LEADING COMPANIES



Table 11: Honda Motor Co., Ltd.: key financial ratios

Ratio 2006 2007 2008 2009 2010

Profit margin 6.0% 5.3% 5.0% 1.4% 6.2%Revenue growth 14.5% 11.9% 8.3% (16.6%) (14.3%)

Asset growth 13.5% 13.9% 4.8% (6.3%) (1.6%)

Liabilities growth 6.9% 17.2% 5.0% (3.0%) (9.1%)

Debt/asset ratio 61.0% 62.8% 62.9% 65.1% 60.1%

Return on assets 6.0% 5.2% 4.9% 1.1% 4.6%


Profit per employee $46,948 $40,326 $38,176 $8,577 $34,392


Figure 13: Honda Motor Co., Ltd.: revenues & profitability



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LEADING COMPANIES



Figure 14: Honda Motor Co., Ltd.: assets & liabilities



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LEADING COMPANIES



Toyota Motor Corporation

Table 12: Toyota Motor Corporation: key facts

Head office: 1 Toyota-cho, Toyota city, Aichi Prefecture 471-8571, JPN

Telephone: 81 565 28 2121

Fax: 81 565 23 5721

Local office: Toyota Motor Europe, Curzon Square, 25 Park Lane, London W1K1RA, GBR

Telephone: 44 020 7290 8500

Fax: 44 020 7290 8502

Website: www.toyota.co.jp

Financial year-end: March

Ticker: TM; 7203

Stock exchange: New York;Tokyo


Toyota Motor Corporation (Toyota) is the largest automobile manufacturer in the world. The company is

engaged in the design, manufacture, assembly and sale of passenger cars, minivans and trucks and

related parts and accessories. The company also provides financing to dealers and their customers for

the purchase or lease of Toyota vehicles. Toyota and its affiliates produce automobiles and related parts

and components through more than 50 manufacturing companies in 26 countries and regions.

Toyota produces automotives in two categories: conventional engine vehicles and hybrid vehicles. The

company's product line-up includes sub-compact and compact cars, mini-vehicles, mid-size, luxury,

sports and specialty cars, recreational and sport-utility vehicles, pickup trucks, minivans, trucks and

buses. The company sells its products under Toyota, Lexus, Hino and Daihatsu brands. Under the Toyota

brand, the company includes models such as the Camry, the Corolla and the Avensis. Lexus is the luxury

car division of Toyota, and is operated as an entity separate from the Toyota brand. Lexus also produces

the luxury sports utility vehicle, the RX330. Hino produces and sells commercial vehicles. Daihatsu Motor

produces and sells mini-vehicles and compact cars. In Japan, the company sells luxury cars under the

brand name Crown and the Century limousine. The Prius is the company's mass-produced hybrid car.

Toyota's sub-compact and compact cars include the four-door Corolla sedan, which is one of Toyota'sbest selling models. The Yaris, marketed as the Vitz in Japan, is a sub-compact car, designed particularly

for European consumers. The company's sport-utility vehicles includes the Sequoia, the 4Runner, the

RAV4, the Highlander, the FJ Cruiser and the Land Cruiser; and the Tacoma and Tundra are pickup

trucks. Toyota's models for the minivan market include the Alphard, Sienna, Estima, Hiace, Regius Ace,

the Noah, the Voxy and the Isis.


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LEADING COMPANIES



In FY2009, the company recorded total sales of 7.5 million units, as compared to the unit sales of 8.9

million in FY2008. Out of the total sales, the company sold 2.2 million vehicles in North America; 1.9

million in Japan; 1.06 million in Europe; 904,000 in Asia; and a remaining 1.4 million in other countries.

Also, the company produced a total of 7.05 million units in FY2009, as compared to 8.5 million in FY2008.

Toyota's financial services business segment provides finance to dealers and their customers for the

purchase or lease of Toyota vehicles. The segment also provides retail financing, retail leasing, wholesale

financing, credit cards, housing loans and insurance services. Some of the financial service subsidiaries

of the company include Toyota Finance in Japan, Toyota Financial Services, Toyota Credit Canada,

Toyota Finance Australia, Toyota Kreditbank and Toyota Financial Services (UK). The company's

network of financial services covers 32 countries and regions.

In FY2009, the company's net finance receivables outstanding for all of Toyota's dealer and customer

financing operations were JPY9.5 trillion ($108 billion) representing a decrease of 7.1% as compared to

FY2008. The majority of Toyota's financial services are provided in North America.

The company's other business segment includes various non-automotive business activities, such as

intelligent transport systems, information technology and telecommunications, e-TOYOTA, housing,

marine, and biotechnology and forestation businesses.

Toyota Motor Europe NV SA (TME) oversees the wholesale sales and marketing of Toyota and Lexus

vehicles, parts and accessories, and Toyotas European manufacturing and engineering operations.

Toyota directly and indirectly employs around 80,000 people in Europe and has invested over E7 billion

since 1990. Toyotas operations in Europe are supported by a network of 31 National Marketing and

Sales Companies across 56 countries, a total of around 3,000 sales outlets, and nine manufacturing

plants.

Key Metrics

The company recorded revenues of $215,772 million in the fiscal year ending March 2010, a decrease of

7.7% compared to fiscal 2009. Its net income was $2,385 million in fiscal 2010, compared to a net loss of

$4,975 million in the preceding year.

Consolidated vehicle sales in Europe during 2010 declined 19.2%, or 204 thousand units, to 858

thousand units.

Toyotas European market share (25 countries) was 5.7%. Lexus sales totaled approximately 26thousand units. Consolidated production declined 10.2%, to 433 thousand units.

Net revenues decreased 28.7%, or JPY866.1 billion ($9.9 billion), to JPY2.1 trillion ($23.4 billion).


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LEADING COMPANIES



Table 13: Toyota Motor Corporation: key financials ($)

$ million 2006 2007 2008 2009 2010

Revenues 239,521.6 272,667.7 299,323.5 233,745.2 215,771.6Net income (loss) 15,623.3 18,718.6 19,559.4 (4,974.9) 2,384.8

Total assets 327,131.6 370,889.3 369,563.3 330,894.0 345,550.3


Employees 285,977 299,394 324,537 320,808 320,590


Table 14: Toyota Motor Corporation: key financials ()

million 2006 2007 2008 2009 2010Revenues 21,036,909.

023,948,091.0 26,289,240.

020,529,570.

018,950,973.0

Net income (loss) 1,372,180.0 1,644,032.0 1,717,879.0 (436,937.0) 209,456.0

Total assets 28,731,595.0

32,574,779.0 32,458,320.0

29,062,037.0

30,349,287.0

Total liabilities 17,581,566.0

20,738,687.0 20,588,793.0

19,000,830.0

19,418,844.0


Table 15: Toyota Motor Corporation: key financial ratios

Ratio 2006 2007 2008 2009 2010

Profit margin 6.5% 6.9% 6.5% (2.1%) 1.1%

Revenue growth 13.4% 13.8% 9.8% (21.9%) (7.7%)

Asset growth 18.1% 13.4% (0.4%) (10.5%) 4.4%

Liabilities growth 18.9% 18.0% (0.7%) (7.7%) 2.2%

Debt/asset ratio 61.2% 63.7% 63.4% 65.4% 64.0%

Return on assets 5.2% 5.4% 5.3% (1.4%) 0.7%


Profit per employee $54,631 $62,522 $60,269 ($15,507) $7,439



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MARKET FORECASTS



MARKET FORECASTS

Market value forecast

In 2015, the United Kingdom automotive manufacturing industry is forecast to have a value of $25.5billion, an increase of 52.7% since 2010.

The compound annual growth rate of the industry in the period 201015 is predicted to be 8.9%.

Table 16: United Kingdom automotive manufacturing industry value forecast: $ billion, 201015

Year $ billion billion billion % Growth

2010 16.7 10.8 12.6 27.8%

2011 18.1 11.7 13.7 8.9%

2012 19.5 12.6 14.7 7.6%

2013 21.7 14.0 16.3 11.0%

2014 23.0 14.9 17.3 6.1%

2015 25.5 16.5 19.2 10.9%

CAGR: 201015 8.9%


Figure 17: United Kingdom automotive manufacturing industry value forecast: $ billion, 201015



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MARKET FORECASTS



Market volume forecast

In 2015, the United Kingdom automotive manufacturing industry is forecast to have a volume of 1.9

million units, an increase of 36.4% since 2010.

The compound annual growth rate of the industry in the period 201015 is predicted to be 6.4%.

Table 17: United Kingdom automotive manufacturing industry volume forecast: million units,

201015

Year million units % Growth

2010 1.4 26.4%

2011 1.5 4.5%

2012 1.6 5.8%

2013 1.7 9.2%

2014 1.8 3.8%2015 1.9 8.8%

CAGR: 201015 6.4%


Figure 18: United Kingdom automotive manufacturing industry volume forecast: million units,

201015



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MACROECONOMIC INDICATORS




Table 18: United Kingdom size of population (million), 200610

Year Population (million) % Growth

2006 60.6 0.6%

2007 61.0 0.7%

2008 61.4 0.7%

2009 61.8 0.6%

2010 62.1 0.6%


Table 19: United Kingdom gdp (constant 2000 prices, $ billion), 200610

Year Constant 2000 Prices, $ billion % Growth

2006 1,719.6 2.8%

2007 1,765.7 2.7%

2008 1,764.6 (0.1%)

2009 1,678.3 (4.9%)

2010 1,704.3 1.6%


Table 20: United Kingdom gdp (current prices, $ billion), 200610

Year Current Prices, $ billion % Growth

2006 2,430.7 7.4%

2007 2,827.8 16.3%

2008 2,713.2 (4.1%)

2009 2,225.3 (18.0%)

2010 2,332.4 4.8%



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Table 21: United Kingdom inflation, 200610

Year Inflation Rate (%)

2006 3.2%2007 4.3%

2008 3.7%

2009 2.2%

2010 3.2%


Table 22: United Kingdom consumer price index (absolute), 200610

Year Consumer Price Index (2000 = 100)2006 116.3

2007 121.3

2008 125.8

2009 128.5

2010 132.6


Table 23: United Kingdom exchange rate, 200610

Year Exchange rate ($/) Exchange rate (/)

2006 0.5435 0.6820

2007 0.4999 0.6840

2008 0.5449 0.7973

2009 0.6416 0.8921

2010 0.6475 0.8589



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APPENDIX



APPENDIX

Methodology

Datamonitor Industry Profiles draw on extensive primary and secondary research, all aggregated,analyzed, cross-checked and presented in a consistent and accessible style.

Review of in-house databases Created using 250,000+ industry interviews and consumer surveys

and supported by analysis from industry experts using highly complex modeling & forecasting tools,

Datamonitors in-house databases provide the foundation for all related industry profiles

Preparatory research We also maintain extensive in-house databases of news, analyst

commentary, company profiles and macroeconomic & demographic information, which enable our

researchers to build an accurate market overview

Definitions Market definitions are standardized to allow comparison from country to country. The

parameters of each definition are carefully reviewed at the start of the research process to ensure they

match the requirements of both the market and our clients

Extensive secondary research activities ensure we are always fully up-to-date with the latest

industry events and trends

Datamonitor aggregates and analyzes a number of secondary information sources, including:

- National/Governmental statistics

- International data (official international sources)

- National and International trade associations

- Broker and analyst reports

- Company Annual Reports

- Business information libraries and databases

Modeling & forecasting tools Datamonitor has developed powerful tools that allow quantitative

and qualitative data to be combined with related macroeconomic and demographic drivers to create

market models and forecasts, which can then be refined according to specific competitive, regulatory

and demand-related factors

Continuous quality control ensures that our processes and profiles remain focused, accurate and

up-to-date


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APPENDIX



Industry associations

Society of Motor Manufacturers and Traders Ltd. (SMMT)

Forbes House, Halkin Street, London SW1X 7DSTel.: 0044 20 7235 7000

Fax: 0044 20 7235 7112

www.smmt.co.uk

International Organization of Motor Vehicle Manufacturers (OICA)

4 rue de Berri, 8me arrondissement, Paris, France

Tel.: 0033 1 4359 0013

Fax: 0033 1 4563 8441

www.oica.net

European Automobile Manufacturers' Assocation (Association des Constructeurs Europens

d'Automobiles, ACEA)

Avenue des Nerviens 85, B-1040, Brussels, Belgium

Tel.: 0032 2 732 55 50

Fax: 0032 2 738 73 10

www.acea.be

Related Datamonitor research

Industry Profile

Global car manufacturers

Car manufacturers in Asia-Pacific

Car manufacturers in Europe

Car manufacturers in France

Car manufacturers in Germany


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APPENDIX



Disclaimer

All Rights Reserved.

No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form

by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior

permission of the publisher, Datamonitor plc.

The facts of this report are believed to be correct at the time of publication but cannot be guaranteed.

Please note that the findings, conclusions and recommendations that Datamonitor delivers will be

based on information gathered in good faith from both primary and secondary sources, whose

accuracy we are not always in a position to guarantee. As such Datamonitor can accept no liability

whatever for actions taken based on any information that may subsequently prove to be incorrect.


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Documents

Automotive Manufacturing in the UK