Essay on Honda 10-K Integration Project Assignment

3048 Words Jul 1st, 2013 13 Pages
10-K Integration Project – Analyst Preparation Assignment
Nanette Guzman
Honda Motor Co., LTD

May 23, 2013

PESTLE 1. Political: Total industry automobile sales in Japan for fiscal year 2012 rose approximately 3% to approximately 4.75 million units. Although the Great East Japan Earthquake and the floods in Thailand had an impact, automobile sales remained stable due to government stimulus policies that provided tax breaks and subsidies for eco-car purchases in the second half of the fiscal year as well as other factors. (p.19) Taxes and governmental policies both domestic and foreign are critical in the automobile industry. Despite the earthquake in Japan, the governmental stimulus had a major impact on their automobile
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5. Legal: Regulations regarding vehicle emission levels, fuel economy, noise and safety and noxious substances, as well as levels of pollutants from production plants, are extensive within the automobile, motorcycle, and power product industries. These regulations are subject to change and are often made more restrictive, particularly in recent years due to an increasing concern with respect to possible global climate changes. The cost to comply with these regulations can be significant to Honda’s operations. (p.25)

There are environmental restrictions being placed on car manufacturers throughout the globe. This is to reduce pollution, congestion and traffic. Because of possible increases in taxes and/or legal restrictions, there may be a fall in demand for automobiles which will result in Honda losing sales and perhaps revenue. 6. Environmental: In our automobile operations, our worldwide automobile sales were significantly lower than the previous year. This was a result of supply chain disruptions caused by the Great East Japan Earthquake and the flood is Thailand, and production shutdowns caused by flood damage to Thailand manufacturing facilities. (p.6)

Honda has manufacturing facilities around the world. They are more prevalent in Japan, Thailand, China and Malaysia. The location of these countries, are often subject to natural disasters that can disrupt manufacturing in the facilities and decrease Honda’s production volumes. After the Great

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