Automobiles are vehicles that use four wheels to transport passengers. While there is no strict definition of what makes a vehicle an automobile, most definitions describe a car as a motor vehicle that has at least four wheels and a seating capacity of 4-5 passengers. This includes minivans with permanently removed back seats, but that does not mean they are automobiles.
Unlike motorcycles, automobiles are self-propelling machines. They are often better suited for light traffic and can handle heavy loads. However, it is important to remember that cars also have a much larger passenger capacity than motorcycles. In addition, it is more difficult to operate a motorcycle, as the rider has to wear a helmet. Motorcycles also have a chain, shaft or belt for power transmission, and the engine typically produces less than seven miles per hour.
Vehicle ownership continues to grow. According to the Automotive Industry Association (AIA), more than a million vehicles are registered every year. The automotive segment has faced a number of challenges, but the company is confident in its ability to improve margins and strengthen its global production network.
Honda has a strong presence in the Asia-Pacific market, and management believes that the region’s market is maturing. The company is targeting the ASEAN market and emerging markets in Africa. A growing demand for electric vehicles will negatively impact the sales mix, however, and it will dilute margins in its core business. Therefore, Honda is focusing on developing its sales mix in light, mid-sized and MCs, while building its global production network. It is targeting neighboring markets such as Brazil, Colombia and Argentina, with the goal of expanding into them in the future.
Honda is also taking on the challenge of electrified vehicles. The company has rolled out standardized replaceable batteries for mid-sized motorcycles with three domestic OEMs. These standardized battery systems will be used across all models and will enhance the company’s supply chain efficiency. But, it is important to remember that electrified vehicles are expensive to build, and there is a chance they could dilute Honda’s margins.
Honda’s global motorcycle portfolio remains a key earnings driver. Its presence in Asia has grown, and it plans to expand into neighboring markets such as Latin America, with a focus on the growing economy in India. Additionally, it will introduce more common parts in 2021.
Motorcycles are a popular form of transportation. Many people consider them an automobile, even though they do not fit the definition. Still, the definition is somewhat technical and varies from person to person. Some believe motorcycles are automobiles, but others do not. That’s why you may hear the term “motorcycle” interchanged with the term “automobile”.
Despite the growth in demand for automobiles, they continue to be plagued by low interest rates, rising fuel costs, and increasing material cost. However, with lower ASPs, it is possible to justify a large market offensive. Ultimately, it is up to management to determine whether this offensive will make a positive impact on the company’s profit.