Honda has reported record full year sales for the 2006 financial year, with consolidated net sales and other operating revenue up 14.5% to 9,907.9bn yen.

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The automaker said sales revenue increased in all business areas.


Honda also realised an all-time record for consolidated operating income.


Operating income rose 37.7% to 868.9bn yen. Honda attributed the growth in operating income to both increased revenues and cost reduction, as well as a positive effect from the depreciation of the yen.


In addition it benefited from the effect of “Daiko-Henjyo” (the return of the substitutional portion of employees’ pension funds to the Japanese government) which accounted for a gain of approximately 138bn yen.

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These factors offset an increase in selling, general and administrative (SG&A) expenses and research and development (R&D) expenses.


Honda also realised an all-time record for income before income taxes, which were up 24% to 814.6bn yen.


Vehicles sales in the financial year were up 4.6% to 3.391m units, mainly due to higher sales in North America. Power Products (items like lawn mowers) was the fastest growing product division with sales up 10.9%, but, but sales of motorcycles were down 2% to 10.271m units.


However Honda explained that this was partly due to the fact that much of its growth in Asia is through overseas affiliates whose production is not included in Honda’s figures as required by accounting standards.


Around 2.6m motorcycles were manufactured and sold by overseas affiliates, up 1.6m on a year earlier.


For the 2007 financial year, Honda is targeting net sales and other operating revenue of 10,600bn yen (+7%) and operating income of 750bn yen (-13.7%). It plans to sell 3.72m vehicles and assumes an average exchange rate of 112 yen to the dollar and 132 yen to the euro.