Honda Motor (HMC) 13 Nov 222023 Q2 Earnings call transcript

Thank you very much for attending. This is Honda Motor Company FY '23 Second Quarter Financial Results Announcement Meeting.

First, I'd like to introduce the executives represented Director, Executive Vice President and Representative Executive Officer, CFO, Kohei Takeuchi.

This is Takeuchi speaking. Thank you.

of Supervisory Head Eiji and Executive Accounting, Unit, Finance, Fujimura. Operating

Fujimura. you do? do I How am

Would Kohei FY to details is second by like yours. ask who on quarter FY announce Fujimura, Takeuchi, financial 'XX the the above. results the give and will 'XX Mr. followed Takeuchi forecast the to floor first

We First your to products you. Honda I'd products. like that support thank stakeholders. I'd customers apologize and inconvenience to all customers who all thank in is like all, are delay towards of of waiting for and our vehicle these you the causing our activities. Thank production to

We are your as gain understanding. soon working as hard deliver products We to our possible. hope to

and year. give the summary forecast the for the a to second for Now explain 'XX financial of fiscal results FY the quarter of

efforts FY prices, Amidst results. shortage, soaring down automotive including difficult combined has and environment, Honda raw been improve driving business with 'XX First, sales company-wide profitability. unit to production material the semiconductor a making

increase America. six shortage resulting depreciation first and increase semiconductor utilized In addition, models, and affected main in we quarter, unit sales models mainly group allocations, in yen production worldwide made in impact production substitute year-on-year. North replaced the of and the year-on-year revenue for second in the and parts the But sold, In profit specific operating a have automobiles. sales of of increased months sales unit motorcycle

automobiles million yen's to by improved taking for value depreciation. the and lowered 'XX price operating profit revenue, units of of to the business semiconductor increases sales addition, units, impact XXX,XXX sales X.X group In shortages. Motorcycle unit FY the impact and supply into due product period increased account with of forecast, -- profit is the In all strong commensurate of year-on-year

in decline expect on inflationary continued pressure the to costs. to we sales, see unit addition In

sales forecast reflecting upward weak preparation future. new increase in However, improvement accelerate efforts, our we operating business the and unit initiatives period, for challenging Honda the previous to motorcycle profitability and electrification yen. environment, profit Despite continue the for for revenue, revised and for sales have will profit growth recent

of in business the major Next, markets. Automobile status our

First the and of But launches. of the down Japan quarter, year-on-year. effect from certain sales year-on-year shortage new supply despite In mainstay and others models at decreased half and due same China shortages drove positive the semiconductor U.S., dealers. model to in sales second period semiconductors production of in inventories the increased

of the to Ohio plants production In JV Dongfeng Ohio. its downward we to second be venture North previous Although the manufacture EV Motor with demand revised Group agreed home forecast electrification. State establish Honda America. China, to In with have three the decided in Honda U.S., evolve as Honda expected quarter, Honda is to initiatives also to announced our batteries the and in Group existing to joint In has batteries. established to Energy firm, a for Guangzhou them FY Automobile 'XX. for in procure EV Solutions also has EV LG produce new and has a

an long-term to continue signed Honda with establish its partnership, to system further aiming towards stable accelerate CATL strengthen MOU a efforts competitiveness. will and we addition, China to electrification. In our enhance in further procurement our

status. Next, the Motorcycle business

the sold in month In year substitute cetera. et of of September. some supply higher were due sales of the for models to in same there replacement many we and recorded were previous sales than record use Although of the effects countries of period semiconductor high shortages, Vietnam, the parts,

revision XXXX previous than leading countries unit and XX an Honda unit XXXX consolidated more to Pakistan Although globally Vietnam by to it sales will well as September, In motorcycle affected launch X.X forecast announced launch upward sales India, achieve neutrality. FY the carbon million -- sales. of flooding in its by models 'XX electric sales other were as China and other by in dropped, countries strong, and for

first using as share per was method parent attributable the sales to Here profit rising of unit material is reaching shows semiconductor Japanese affiliates. and The of accounted as well to and the loss. an table Earnings due with mainly of profit unit increased incentives of a shortages decrease FY attributable automobile sales sales increased operating in of impact. raw motorcycle to price profit billion half commensurate overview to ¥XX.X prices, the billion enhanced of product 'XX. currency unit ¥XXX.X and despite share investments billion, owners increases reduced for ¥XXX.X production due and And and value and equity

Next, consolidated 'XX forecast. FY

is Earnings countries lower to and Although the and for the upward billion, to continued higher second the to upwards addition automobile ¥XX by to unit operating reflecting billion parent shown revised are efforts billion the ¥XXX of on see Unit Exchange for ¥XXX dollar motorcycle we attributable owners unit of impact the we billion. half, sales, forecast as in to to well year. are revised ¥XXX dollar income other assumptions profit/loss impact. pressure expect table. per currency improve in the Vietnam in ¥XXX rate by including share the and as costs India, the to profitability, sales to ¥XX further sales full

remains ratio stable Honda dividend ¥XX share. dividend interim per payout of dividend annual per dividend to a is consolidated continue sustainable The for and aiming forecast will and payments, ¥XXX strive is dividends, XX%. unchanged for share. As for

Fujimura, of August of Head the will total October total details. XX, ¥XX share at Finance buyback give number the billion. on announced of XX, of Supervisory XX.XX and Unit, was Accounting as shares Executive repurchased a Regarding shares Operating of cost million

XXXX a million unit units in business sales Power with were Group's Asian until the in X.XXX second in Motorcycle the to decline Products is cumulative as in America. America. was is units due mainly FY sales North explain. million due And quarter Automobile it to me X.XXX decline And North sales businesses, million incremental Let the countries sold Honda X.XXX year-on-year. follows. business units

let before billion, ¥XXX.X me for ¥XXX.X downs ¥XX.X explain year-on-year. ¥XX.X behind year-on-year. up ups factors billion first year-on-year. and decline profit were was the The quarters before taxes billion, of two Operating income billion by profit the Next, tax profit

Excluding factors ¥XXX.X profit impact, of as by are was practically follows. negative The billion. the foreign currency breakdowns

declined billion of Regarding profit reduction due in sales, by in to financial changes and the decline ¥XXX.X mix profit impact unit model businesses. sales, in

there reflecting Regarding impact costs, pricing, and of retail and prices product raw materials value soaring impacts prices were product improvement. by

billion. ¥X.X the profit by However, increased

Regarding miscellaneous expenses, billion quality to cost. ¥XX.X due by related declined profit

declined and profit research by Regarding ¥X.X development expenditures, billion.

And associated OP billion, was at the in In and terms revenues at Automotive of each business Motorcycle ¥XXX.X profit operating of of of businesses, ¥XX.X billion. and profits in operating categories, business sales Services was automobile of ¥XXX.X was combined, sales be and the when estimated to the Financial together. Financial is ¥XXX it our businesses, businesses operating aggregated billion. profit Service the billion Out with Automobile

of Other being Power operating was and which losses engine Next, operating businesses the billion, profit ¥XX and ¥XX billion. businesses of includes aircraft aircraft Products

will XXX.X explain I Net Next, of of Free the billion. cash about flow non-Financial our was end businesses situations. flow was cash the at the Services billion. ¥X,XXX.X quarter cash second

reflecting in forecast, XX.XX unit the will With our business for XX.XX reflecting America. a compared as mainly and to units, Motorcycle about million so the FY sales good sales to forecast in mainly million XXXX. decline up regard talk the me sales consolidated the business consolidated, be in unit in as the would reflecting business Pakistan units, sales be we countries our sales and the flood be Vietnam. previous North expected China Group's on. When a to X.X of XXX,XXX Unit and Honda in India by expect performance such demand performance Automobile million unit decline in expected Let

For maintained the Power Products forecast we units. of X.XXX businesses, previous million

the last compared year. Next, our tax behind from factors before I'll income results of explain profit [indiscernible] as to

of profit to billion be the around level operating by up from the same profit tax the expect to We last before year. fiscal billion, the ¥X,XXX and be year-on-year ¥X.X results

we negative of impacts, of profit the a currency foreign Excluding as ¥XXX.X breakdowns expect are follows. billion, which

the our and increase ¥XX.X sales, sales due of unit by For be of impact increasing to profit billion motorcycles will automobiles. the

on. and prices ¥XXX and so price raw declined retail impact, Regarding materials to cost due billion by profit soaring

Regarding decline billion and our to sales profit due by would miscellaneous quality-related costs. expenses area, ¥XXX incremental

we to research expectations before profit revised development profit well up taxes the by our by up ¥XX as ¥XX differences be Comparing billion. to and as by billion. income category, ¥XX will forecast, expect expenditures previous revised new the be billion, profit drop the For to operating

billion. of retail in enhanced inflation to profits foreign to impact, by is impact, product cost practices will negative billion impact, expect currency profit regarding which by in to Excluding sales And down are: breakdowns -- area the increase the automobiles. unit a cost price we reflect of add expected impact, ¥XX billion although the pricing decline mainly due for we ¥XX due ¥XXX manage to sales some values pricing

the research billion. expenditures, by to development go up Regarding and profit expect we ¥XX

previous amortization and to reflect spending as Thank depreciation for you as revised FY CapEx, explanation. currency well XXXX, the R&D expectations for my impact. concludes much. Finally, That very the we

Thank very And for Q&A. to attention. much. you you I would now your Thank proceed to like

to please. like [indiscernible], [Operator We'd to go Instructions]

Jidosha is you name Nikkan [indiscernible] from me? My Can newspaper. Shimbun hear

Yes.

two have questions. I

seeing do your when to ideas yen, your a and But it changes major we're But depreciation has approach? there recession U.S. The a currently up second benefit this can a its China. First, to of concern prospect when of to boosted How the question, will production order any your kind economy? procurement, comes what maximize the you see and in are of the -- Honda is your localizes you profit. making at worldwide, and come markets, production? of

first question, all, have is the your [indiscernible], is our sites. of policy we to you set Mr. have demand as rate of we production exchange That mentioned, policy. basic rightly in This exists. so our up how producing regards the well where

that the of and difference we is an in major does to which of impact from situation, manufacturers other XX cash consumed, don't a difference. generate -- a of produced profit said overseas, locally is to it exporting that but have into billion, current is half still, compared explain swing extent. the and now course, is loyalty So overseas? having also, billion we U.S.-denominated mainly there we only, locally big. manufacturers, it's And there's But used those conversion, of ¥X, that the that convert impact the half currency to But, it's of think so components fluctuation it's billion, be rate, we currency that, the I to given the a In meaning certain if have export XX yen. Japanese of And our to or XX flow. from impact, there Japan, the the this compared are received

the are against for the we So is impact of estimating dollar. But yearly forecast, the now ¥XXX that currency. as

this supply the would still, an profit. But so in ¥XXX chain. billion be And impact of

others have We and suppliers relationship.

produce is to is So the shift where in the will our is we That's immediately to your U.S. midterm and it's can And not Basic the Japan. case to well, underway -- place. the vote the China's the in count United regards in currency that States. demand now production election right question. exists about philosophy economy, remain

everyone X% an be the to likely inflation the end impact on Given towards of says, year, is there economy. continuing the as the

concern. we sales, have lost we look the situation, So due if waiting products. certain for current shortage are supply models at some we that unit also customers share semiconductors, to car but the for But our our of

this regards produce our looking said, the will being purchased a the occurring. But customers. believe certain therefore, the by be increase, in with is situation cars to Chinese is mind, impact that rate we Likewise, in And to will at So in as we operation. we our the interest the keeping economically, China, there there inflation extent. current customers, continue be And will our car few month is declining. ago million to is line that, a the units the market, in about month, see car years with therefore, passenger we've But electrification. electric we XX% automobiles Last compared especially the second. And one. this per GDP this XX ratio. market annum, EV also the first or -- and XX% announced -- a And have we on annually, some

Thank China. want China. our is to are market And we products demands also to meet customers' in this on how focused we electrification, you. our We and in want

[indiscernible] next Newspaper, So you much very question, Thank Nakamura, please. Mr. Yomiuri

you Shimbun Two Newspaper. me? Can hear Nakamura from Yomiuri questions.

the sales. potential. continue First on reason also in the And Motorcycle good, and all, of forward, Southeast would is price Japan it Japan, and long you increases how potential do price with and me behind? Asia business? are going think please markets The what overseas And in increases share are

the the inflation call and question, you we thank repricing price the it. values. That's your So product. are in product that for pricing, situations of retail pricing situations, U.S., reflect the values we And to including how our reflecting the

are equipment's Of materials and also course, safety soaring, as rearranged prices well. raw

So such including that prices, price all Japan, has level appropriate buy. on we Including try And course, quite revenue. an the the product have them we raw for that, to soaring is stock people situation, a buy in the in to impact U.S., the in that low. products. when of And the material level

However, have companies peer sort the like competitors, semi also with we industries. a of in relationship the

at this do quarter, specific look increasing they good. we today. moment was then reacting would situations, performance necessary, motorcycle the in very at do how will for We of we have the and repricing, as But not And the business information prices. Japan, if as in second are the Motorcycle thankfully,

the and now, plans the revenue. Thank or was forth -- will any also so good, the the Vietnamese number Motorcycle me, best And you. Indonesia come we businesses, electrification for Thailand, Specifically, our gave the continue? term, it as try the and and or long Asian we appropriate that of XXXX will with is economic units sold including with of up how for for plans will pricing for and kind EV, turmoil's markets, Thai electrification area -- specifically additional from 'XX. us in motorcycle. have as to market this perhaps And that, excuse the continue countries India Vietnam, without very which the an is toward Well, and

Nikkei. question. Mr. please? Next Tanabe,

hear Can you me?

Yes.

region. in America, Well, I forecast. depending been In some shortage automobile, it's unit about said the the sales there on unit Well, the past that might be about semiconductor North differences think reduced. you

North that the So and think That's Asia? to what What America continue? happen the Japan And Can next is first some differences? do this regional is and you likely you to fiscal question. give in year? about likely

be if about is profit exchange think question the second But to challenges of longer, I the there this an way thinking ahead. extent. quite contributed continues The some might the rate. to it's towards Well,

candidly So share how assess you can you us with forecast? currency the

Tanabe-san. much, very you Thank

catch And due shortage But downward units, of a we we First, to semiconductors, U.S. the units. here Japan units, have in up the And by it's Asia. about downward revised revision. automobile to and trying the XXX,XXX-unit XXX,XXX are

semiconductor. on As earlier, with type Civic. has this it semiconductor issue I is And specific that impact has CR-V, of explained already our it a an

And these to of was China? Meanwhile, think the North increase China, so And catch for up. the second we second is this can U.S. half, the will situation. we shortage. And impact up. the in quarter, this up. it When have What difficult an the we in in seen second production And about it we was And of the therefore, system therefore, America models, we the this that comes can specific difficult the such production. half for But this, we the think the catch in be year, to half, it's catch naturally, downward is us that impact. revision Asia. think first for And there that to

said, small. are growing. the et cetera, You the well, relatively And mentioned it's Asia numbers cars therefore, -- in Asia, are Indonesia, not about as I

semiconductors the the there with cars, smaller available. So are

So can there. up we catch

of the well, But this to have semiconductors our inconvenienced the shortage. experience a supply semiconductors We quite customers sometimes an we year, With apologize. old extent. there, fiscal

supply. So we occurring are to the some to the and observe try in abrupt carefully, we to situation incidents have there because monitor need carefully

impact, producing we to where currency given Now the a But long-term an is cannot the We such explained, occurring there believe have volatility, does stability. this. impact about fluctuation already hedge Therefore, where is limited. against we currency we this short it time, I've exists. be situation, and period need that the in should currency of a as demand have the

Thank you. all. is That

question, Next Newspeak.

Mr. Newspeak's please. [indiscernible],

much. very you Thank

questions. you. Two Thank speaking. [indiscernible] Newspeak's

operating the on profit Automobile businesses. First of

descended to for will the be you lower. about go second But As there. hub? question Inflation Ohio what do Act production the EV electrification have last to plant Ohio the as presentation the already you of how you top up? as expect benefits on Reduction before, said explanations the a And additional the of year, about course, bit electrification. there take And this? compared production. are you hub can you do The And IRA, situation is any In OP the of

in reducing as automobile have to the last plants fixed of So as said, to that, big the the we've been Japan Europe be you improved. lower And in was factor. And compared of a and operating three is those supplies. up, are the for That to of be year. And number one automobile of materializing of closure last two, instance, and Because units constrained. efforts years, so have suggested. forth. as it push is OP profit rather making And also semiconductor to cost,

have We those efforts. The to specification specific numbers make designs are so on or a efficiency. Honda better and architecture, reflecting

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process still We well. of be the on And improvement. Ohio restrained. the sales in of electrification are still And in The improvement towards hub. hypothetical are numbers as track, there and course, unit fact, we are situations

working will IRA places the where and $X,XXX LG. still the You well. and benefits for EV principle make And we produce exists, so delivered but it's on a be Marysville from to And you. mentioned also, are will Ohio, products. and is and to IRA we to batteries to Thank other we plans. [indiscernible]. the a to production so of $X,XXX decided, And and and on those according There course, Act your be two with plants demand incentive have in the have hub this the take details plants, is

[indiscernible]? Next question please. NSK,

from hear you me? Can This NSK. is [indiscernible]

Yes.

you. Thank

But part any. if revenue? Can profit, at profit, record revenue, it high. record of high the upgrading in you numbers The record elaborate was suppliers. cost on thought are reasons it's high. I record the was you support looking sales thinking I'm what sales which high, Can And about the on elaborate part. First, was the And you're about terms explain? can a announced. There you question the a don't to what record cost-wise? the was I to suppliers? think second the increased? That's And What support giving about first

for [indiscernible] thank the question. you Mr.

high. a regards the to not all quarter in the second first record six of But in terms time, it it First, attributable this the and FY sales mainly high. half and to the the recorded And three months months revenue currency. was forecast was 'XX volume, a unit record

this really we that not So proudly say did high. a was record

so It to the not the not unit therefore, And second was And the attributable currency. to operating high. high. was was that, quarter, record margin, XX% and sales months, XX% or more. in operating or more three profit margin mainly a due was the -- the profit -- But motorcycle

is this a we forecast cetera. also About in last FY in supplier fiscal material to logistics, Well, very rise a et this So the high compared also there number. yes. year, price the support, is and raw inflation, the 'XX

inflation line different be an same part on the likewise, consult the is And to done. well, experiencing suppliers, significantly So what cost. with with think having suppliers, we them are situation impact the about of needs the pressure. and the And in

where to support it's the for the the case of and tailor different same consult to measures. So all provide, to we if other with the take them necessary, providing support, suppliers. not suppliers, We have but or we'll be the situations

have we decide So each for to case.

all. is you. Thank That

Thank much. you very

Davies, one, Journal, Next Wall please? Street Mr.

weeks it We're on Honda's question. worst you similar one hearing for ago, Is semiconductors. of shortages. few back Thank my And very up they've from like follow-up ramping other on any capacity. because their pushing impact at in second that they past heard having some thank with especially trouble that view regard you. vehicles EV of they're is General that from issue, I some that my timelines moment? those? taking much we to timelines they're the developed the the Honda made feel Is Hello, question automakers from jointly Motors around and seeing electrification. A have battery

worst or time has been over. semiconductor question, So a the whether not

large the from of the semiconductor. been level, has gone general I has at viewpoint, the high our for personal gone period of worst semiconductor think shortage -- use

application and Where the time supported, specific have of worst But types the think the we matching shortage. semiconductors in well semiconductor. don't we still I so time over. on. have the different have of are vehicles the passed for applications different some the still area been we specific the worst has However, in and areas,

try of customers delivery soon make So a the to our of course, we and that can, the the address can to and so as products situations. delivery we situation production as to we optimize

with this electrification We are GM timeline EV working have with after we on moment, delays, program XXXX. that. a GM And also and at

that two one, not with going And battery production to vehicle their with GM We supplies. plans that. particular capacity for is have affect

as be don't of And heard, We all need that to is electrified? is of those. will and haven't heard our Thank GM but going batteries don't case. then response. know if They I say I that they're how the as yet. vehicles know And that, the we might haven't many that you.

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can [indiscernible], hear you me?

Yes.

my automobiles. on you About an the question. the think you next will The it do impact to material will Or for Is What continue this fiscal will profitability that's stop, year? to rise cost your be? outlook? material raw raw and situation first what stop? it mentioned. I likely this to Well, the think into cost, have is going rise inflation is

negative. the your the at end is question. detailed And September, have forward? inflation the about think what for going very positive I the outlook net So numbers, for second of profit a Well, that forecast is profit, you a looking but some operating

is do of what where -- So cause this negative? the

Yes.

few but it Let the slight But a the it's showing few me not logistics downturn. the months, raw material, rising. example, cost yes. outlook. and bare metal, is cetera, for inflation, the the about is Well, years -- depends explain for It also part the past a material et what on

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demand some production et cetera, As electrification that the prices and of balance progresses, supply balance, think and determined. I are the

in first be there six but using months, I to products profit might profit. our we capture think we and changes And provide on accounted you the have customers. for good operating to the share we time, were months asking about some it point equity the that this is positive. about the address the want But about changes, is method. issue. the how for those really, so for profit, negative and this first reason operating early to that the profit six investments About at So is can nonoperating the Well, also

the for and and rate hard as Now rate think is interest exchange to first, the volatile I finance.

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one the so negative cetera, et is the of have of derivative, And hedged. the we factors. hedge, assessment the And

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please. Next question, Automotive Hans-san, News,

question me? can a Ask in I? Can you English, hear Hello?

Sure.

with strategy EVs? it of EV approach the on Sony. network Will different of should servicing some new network? servicing EV United States? regard existing is need the EVs? independent plans of and you EVs those Honda about My its -- partnership kind question much. will sales with the States, or Honda in specifically Or Thank completely be any those in retail use Sony-Honda say, the Can the to Or it of the guidance retailing us those to very give you United how will support and sales I to

kicked in venture the we joint day, And company, not [indiscernible] be together. joint other and has joint we're Mobility. announcement established That venture we're of a Sony off established made a going -- that And will a framework, is course, may to with Honda, So sell how but why Honda is have not going it how September. products, That Sony, the And sell, new you be as company. will it clearly, Mobility. established the network we going share using at a to case. not I be with new existing new we moment. the yet, are can't so And defined not the to

service and Acura would and However, of network network, we Honda XXX Acura Honda X,XXX service service at have XXX that. our network, X,XXX of course, U.S. make use

world, new sell things. the kind mobility completely new new to with of way the line maybe However, in

is So going new, are those it but contemplation. things still be all think I under to something personally,

that no joint with don't something is I nonconventional, I no today. think And it totally So that to going Honda, up company. have venture to is But we be started Sony, this how can refer new.

one. next the for us expect please So

Thank you.

[indiscernible], question, Next please.

[indiscernible] me? you hear can Ms.

Yes.

is Nikkan newspaper. from name Kogyo [indiscernible] My Shimbun

good. you the the situation, models Can of elaborate will be at said that? to Now well, in And of models you mentioned operating automobiles that replace you that second, looking you some volume, I current that the what is why about motorcycles the for the interpret And operating motorcycles cetera. is much et But margin but the it way? replace? of reason sold. you the impacted. did were that that not Can kind on margin unit regions? But What the

models be first But first reference. in six cetera, replaced, make for et have of kind months the the and shortage given three specific think months catch what in been will it of I half, United production CR-V, we difficult in second regions, we or or what to we the a the current -- in And Civic Well, any semiconductors. States, the up. cannot had half situation,

therefore, we the we instead, are these not place these and we have shortage And them Asia, do those for models. small models Japan with a So semiconductors. in which -- of

So deliver such we a things customers -- and products so as that as are weekly we also and doing basis, to possible. can our regional on soon

-- taking So the unit are yes, such we achieving well, About semiconductors, profit intended of to. we replacements sales because we margin, the the that place. automobile are shortage not of

Vietnam, the So has we that country, is we impacted And the we're motorcycles are have to. countries, difference. wanted different. the are that the volume likewise, motorcycles reason positive. by believe those Those that which achieve for able sell on market, and the semiconductors. in margins, which Motorcycles, to depending cannot And increased. unit therefore, cover the and with -- And I high Thailand in therefore, margin

So the problem. any it's which we which have the growth areas case sales. we you. in Thank high do fortunately, that But the have -- those we in margin markets saw unit not a were where not

Thank you.

Next question [indiscernible], please.

have two Toyo I Keizai. questions.

a before the is the question the behind factors profit price the of First factor you [indiscernible] retail tax, confirmation. In ¥X billion had for the the PowerPoint, and downs. for ups

this pricing had as share it about Is successfully situation that make And also soaring that went? that? they're produced the cars, vehicles. and what raw also strategy directly You on raw fact, had on plus with the you us well. number. is impact in is Japan, prices managed And talked Japan. how impacting in And pricing vehicles, repricing Please the materials to mini your Kei are the consumed mini you difficult because in

the me explain let So first part.

throughout ¥XX was inflation fiscal of ¥XXX plus. upward total happening the But pressure our the of billion distribution, material suffer rather. the the half, throughout this because material situation, course, the prices like hike, -- course, price raw Despite was values. raw to the last pressure we cost labor from for this approach much. cost have and is And and we what the reflects And same in half, to billion, situation, issues. of to -- about forecast the year, speaking, actually, that events second the is negotiation, up supplier specifically to pricing inflation year, that try annually a first and -- as time, about. But year question supplier, That prices managed. previous the cost say one, compared For provide those

So next. a I on actually up do we is positive what's year, But first actually, don't when already, pricing, to throughout first in But take plus the going anticipating happen half. that impact we that the can period. increase in absent half absorb and those of half. allocated of impact And costs have we then And how first we are is think second factors. over factors the those the all half differences

in have we products companies, price OEMs are and of pricing supply watch that course, situations looking too. prices reflect to products kind those the out raw directly. the is So of speaking vehicles, the And -- of Japan mini we, material the it mini [indiscernible] of as competitors of the other at well. domestic for And those the as price a hike difficult we of the course, to market, cars -- said of

do that over to competitor's try would decision make price new we going -- forward. part the have when we but thinking we product, for the we a product. specification, it the We of to as hike on And the model, new may have go the price pass

Thank you very much.

be question. question the [indiscernible] next please. The will last

you Asia, push there fast. Indonesia. reason? think growth about to About pressure to your the detailed competitors is motorcycle Compared see motorcycles, what motorcycles. the is competitors -- in others, try motorcycles? the is that But Is about electrified not question Can EV EV that sales, the talked do you reason coming I hear? a from You -- to

much. more elaborate on where you thank than [indiscernible], is -- XXX%, this slower come -- your Can you but What growth did very is the question? than which from? other Indonesia regions.

second the quarter, quarter XXX.X%. it the fourth I says sales, XX%, in In me. think. And it's Excuse Indonesian the

So about. ratio talking I'm that

look to a Indonesia, last that it Thailand there and the regards of and year. economy, at comes recall. When to slowdown time, Well, of the an Vietnam, recession, of in the And is Sorry. impact Vietnam in impact, was Thailand because grew. lockdown up. point as especially there that Asia, it I'll in you

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Thank you much. very

presentation very presentation on presentations, for our available this and the our So much thank our package are your Those you course. concludes financial indeed of participation. section materials and today, website, results