Honda Motor Co Ltd

TSE:7267

Earnings Call Transcript 2021-Q1

[Matt Watanabe, executive]

Ladies and gentlemen, we thank you for joining us here at Honda Motor Co., Ltd. FY '21 First Quarter Financial Results announcement. I'll be serving as the MC. My name is Watanabe from Corporate Communications.

First, allow me to introduce the members on stage: Executive Vice President, Representative Director, Seiji Kuraishi; Senior Managing Director, Kohei Takeuchi.

As for today's announcement due to COVID-19 pandemic, there are no audience inside this room. Instead, we are live streaming this session. We seek for your understanding.

First, I'd like to call upon Executive Vice President, Kuraishi, to talk about the FY '21 first quarter financial results, please.

[Seiji Kuraishi, executive]

Allow me to begin my presentation. From the end of FY '20, the COVID-19 pandemic has put about global change, impacting people's lifestyle in many ways. Honda also, in response to the lockdown and other restrictions, and halt in economic activities, had to stop its production and marketing activities in many countries throughout the first quarter.

In automobile operations, as of the end of April, when we saw a significant impact of the pandemic, we had suspended production in 12 out of 17 countries. However, currently, all factories, plants have resumed operation, and we are working to quickly supply products to the market from the second quarter and beyond.

The stagnant global economy has resulted in a major drop in demand. Business environment is extremely difficult, yet Honda will make all-out effort to overcome this crisis and will aim for further growth.

Let me move on to explaining about FY '21 first quarter results and the outline of the outlook we have for the whole fiscal year. FY '21 first quarter Honda Group's unit sales saw a drop in demand globally. This, combined with temporary suspension of production and marketing activities, resulted in a decline across business -- all business segments: motorcycle, 1,855,000 units; automobile, 792,000 units; Life Creation, 1,083,000 units.

I'll next talk about our major markets. First, Japan. The industry demand was tightly hit by the pandemic. In addition, there was a rush purchase prior to last year's consumption tax hike, resulting in a significant year-on-year decline for the quarter. Honda also saw a major decline in the cumulative 3 months results, though the new Fit sales were high.

N-BOX series ranked top in the new car unit sales category in the first half of the year. FY '21 results for the Japanese market is expected to dip below last fiscal year due to the impact of COVID-19. The market slowdown is expected to bring down Honda's unit sales below last fiscal year. However, current sales are recovering. And with the new Fit and N-BOX and other key models, plus the effect of new model introduction, we will aim to expand sales.

The U.S. industry demand is showing a significant downturn from last fiscal year due to the new coronavirus pandemic. The fleet market is especially hard hit. Honda, likewise, saw a downturn from the same quarter last year, but we secured top position in unit sales for the 3 cumulative month sales in the passenger market. Honda's recovering at a faster pace than the market.

The U.S. market this fiscal year is forecast to finish below last fiscal year due to the resurge in the number of infections from mid-June and the major uncertainty ahead. Given the market conditions, Honda is also estimating a year-on-year decline, but we will continue to offer attractive products like the CR-V Hybrid launched last March.

Next, China. Though we see the impact of the pandemic, economic activities have resumed along with a number of government pump-priming measures. And the Chinese market has outperformed the first quarter of last year.

As for Honda, though the launch of Breeze and Civic brought about good results, the supply shortage caused by temporary suspension of production had a negative impact and retail sales was down from last fiscal year first quarter, though wholesales was up from the first quarter last year. In calendar year 2020, the overall Chinese market, though the market shrank during the first 3 months, in the second half, sales are expected to recover to a level equal to that of last year. Leveraging the new model launch effect and full factory operation plus supply recovery to the market, Honda is planning to outperform last fiscal year's unit sales.

Moving on to motorcycles. The industry demand experienced a major downturn from first quarter of last fiscal year due to the pandemic. Asia was especially hard hit. Regarding Honda, those sales were good in China and United States. Due mostly to production and marketing suspension in Asia and Brazil, unit sales was much lower than the same quarter last year.

Currently, due to lifting of restrictions in the largest market, i.e., Asia, and thanks to the resumption of production and marketing activities along with stimulus packages, global wholesale is 38% year-on-year, retail is 52% year-on-year. The recovery level is slightly above the market average.

This fiscal year, the overall market is expected to finish below last fiscal year due to the continuing impact of the pandemic in major markets, such as India and Indonesia. Regarding Honda, though we are likely to see a drop in mainly our major markets of India and Indonesia, Vietnam and Thailand, who have currently recovered to last year's level, while China and the United States are above last fiscal year. Honda will work to expand its market share by continuing to launch attractive products so as to maintain its world #1 position.

Next, summary of FY '21 first quarter results. Despite significant drop in demand attributable to the pandemic, combined with production and marketing suspension in many countries, thanks to Honda's company-wide cost-saving efficiency measures, operating loss was JPY 113.6 billion. Though there was a contribution from the share of profit of investments accounted for using the equity method, loss before income tax was JPY 73.4 billion.

Although compared to last fiscal year, profit dropped JPY 363.2 billion, if we were to exclude the pandemic impact amount of around JPY 440 billion as well as the currency effects of JPY 10.8 billion, the numbers improved, resulting in a profit of approximately JPY 88 billion. Unit sales and financial results are as shown.

And next, FY '21 forecast. Amidst uncertainty deriving from the COVID-19 pandemic, Honda will make every effort to improve profitability. The forecasted operating profit is JPY 200 billion.

Contribution from the share profit of investments accounted for using the equity method will bring the planned profit before income tax to JPY 365 billion. This is a drop of JPY 424.9 billion year-on-year, but if you were to exclude the COVID-19 impact to difference from last fiscal year amounting to approximately JPY 500 billion and currency effects of JPY 80 billion, profit would be approximately JPY 150 billion higher than last year.

Honda will continue to make effort to make steady business structure improvement and bring about improvement in earnings structure. The unit sales and financial results are as shown.

Next, regarding dividend. The dividend for this current first quarter is JPY 11 per common share. The annual dividend for FY '21 is forecast to be JPY 44 per common share. This is a drop of JPY 68 annually, but payout ratio is 46% at par with last fiscal year.

Next, I'd like to call upon CFO, Senior Managing Director, Kohei Takeuchi, to give you the details.

[Kohei Takeuchi, executive]

So let me start. Regarding the financial summary of the first quarter, 3 months, the group unit sales of the motorcycle business increased in China and so on and fell in India and Indonesia and so on. Automobile business increased in China and so on, and it fell in the United States, Japan and in India.

With regard to the profit and loss situations, the sales revenue was JPY 2.1237 trillion due to the decline in all business segments. We had a reduction in SG&A's costs and so on, however, because of the revenue decline associated with the volume and model mix, we resulted in the operating losses of JPY 130.6 billion.

Let me explain the factors behind our ups and downs of the profit before tax. Despite the decrease of the SG&A or the effect of the cost reduction efforts because of the impact of the COVID-19 on the decline of the unit sales and so on, profit before tax fell by JPY 363.2 billion from last year.

If we exclude the impact by COVID-19, around JPY 440 billion, and the negative impact of the foreign exchanges, JPY 10.8 billion, that are included in the profit before tax, we would have about JPY 88 billion higher profit year-on-year. Further, the pandemic impact also is found in the volume and module mix factors, SG&As and in equity income.

Then let me move on to our performance by business segments. In motorcycle businesses, unit sales declined. However, with reduced SG&A and R&D expenses, we managed to have operating profit of JPY 11.2 billion. In automobile businesses, SG&A expenses reduced. However, due to unit sales decline in the U.S. and Japan, we resulted in operating loss of JPY 195.8 billion.

In financial services businesses, due to the credit loss provisions booked differently, the operating profit was JPY 71.5 billion. In addition, in the Life Creation, Others business segments, we had operating losses of JPY 0.5 billion due to reduced SG&A and R&D expenses. This segment includes an operating loss of JPY 7.1 billion for the aircraft and aircraft engines.

With regard to the cash flow, cash flows of our businesses during the first quarter FY 2021, it turned to be the negative of JPY 442.2 billion. Cash and cash equivalents at the end of the first quarter period was JPY 2.2509 trillion. In addition, the net cash amounts to JPY 1.4195 trillion, which equals to 1.4 months worth of our sales revenue as we estimate.

As of now, there are no major concerns in terms of the liquidity on hand. We will try to restrict cash spending such as investments and expenses across operations worldwide, whilst obtaining financing that's necessary in order to ensure our liquidity on hand going forward.

Then as for the consolidated forecast for our FY 2021, we expect the group unit sales of the motorcycle business to be 14.8 billion units; automobiles, 4.5 million units; and 5.31 million units for Life Creation businesses. And this is the forecast of FY 2021 and consolidated business performance.

Let me explain the factors for ups and downs of the profit before tax. We will push forward our efforts to improve revenues by reducing costs and SG&As and so on. Profit before tax will be down by JPY 424.9 billion year-on-year due to the impact of foreign exchanges as well as the profit squeeze associated with the volume and model mix. The COVID-19 impact on PBT for the last fiscal year was about JPY 165 billion, and we anticipate that it will diminish toward the end of this fiscal year. We estimate it around JPY 665 billion, finally.

And if we exclude our COVID-19 impact of JPY 500 billion, it's variance from last year and the negative impact of the foreign exchanges of JPY 80 billion, we would have about JPY 150 billion profit increase year-on-year according to our estimate. The COVID-19 impacts are included in volume and model mix, SG&As and equity income, respectively.

This shows our expectations of CapEx, depreciation, amortization as well as the R&D expenditures in FY 2021. Thank you very much, indeed, for your attention.

[Matt Watanabe, executive]

Thank you very much. This concludes our presentation for the first quarter financial results FY 2021. Then, we will start entertaining the questions from the media participants, and we have already announced the web meeting system to the media participants prior to this meeting, and we will accept the questions through that system.

And we will resume our session at 3:40. So please wait for more awhile.

[Break]

[Matt Watanabe, executive]

And now we'd like to proceed to Q&A. We have arranged for a media-dedicated web conference system. [Operator Instructions]

The first question is from Nikkei Shimbun newspaper, [ Mr. Hanada ]?

[Unknown Attendee]

[ Hanada ], from Nikkei Shimbun newspaper. Can you hear me?

[Unknown Executive]

Yes, we can.

[Unknown Attendee]

Hello. Can you hear me? I have 2 questions. First is about the investment for this fiscal year. Well, capital investment, R&D expenditure, you've already given me the total amount, but can you explain more about how you are going to try to nuance the investment?

For example, telework and security, it might be that you have to increase your IT budget and also R&D CASE investment might have to be increased or due to the COVID-19, you might have to cut down some of the investments you're planning for this fiscal year.

Next, about the future outlook of your motorcycle business. In your report, you said that in India and Indonesia, due to the pandemic and also due to the expected prolonged economic downturn, how are you estimating the future demand for motorcycle?

And also, there are other factors, such as environmental regulations and competitors in India. So how are you going to try to improve your profitability given all these conditions?

[Matt Watanabe, executive]

Thank you very much, [ Mr. Hanada ]. This is a summary of the question. The first question was in regards to capital investment, R&D expenditure for this fiscal year. How are you going to try to nuance your budget? And the second is in regards to motorcycle business, given the situation in India and Indonesia, how do you see the recovery of the motorcycle business, please?

[Unknown Executive]

First about investment, R&D expenditure. We, in order to further grow our business, we believe that we need to continue to invest. This will remain unchanged. Meanwhile, due to the COVID-19 pandemic, the work style is going to change. So we have to try to build the environment for telework and strengthen our security. So we need to invest in ICT, and at the same time, work on CASE for the future. So we need to invest in particularly these areas.

As we've been saying, we have to solidify our existing business and also prepare new businesses for the future. Given the changes taking place due to COVID-19, we have to accommodate these changes. In regards to investment, R&D expenditure, it might be that we will have to review our plan, but we want to keep this to a minimum. And also, we want to collaborate with others, so as to make efficient R&D and expedite our business speed.

Next, about the motorcycle business. Globally, motorcycles are in our major markets of Asia, India, Indonesia, badly hit due to the COVID-19 pandemic. We have yet to see the situation be contained, but we do not want to engage in discount rates. Instead, we want to continue with the measures that we've already put in place, enhance our presence in these markets.

Once the market recovers, we want to make more efficient our business. Meanwhile, in Vietnam and Thailand, where we have high profitability, we have already seen the situation normalize. We want to keep an eye on the developments in different countries, areas and respond in line with the local situation. That's all. Thank you.

[Matt Watanabe, executive]

Next question. From NHK, [ Mr. Oey ], please start your question. Please turn on your microphone on the Team's system.

[Unknown Attendee]

My name is [ Oey ], from NHK. Can you hear me?

[Unknown Executive]

Yes, it's fine. Thank you.

[Unknown Attendee]

So I have 2 questions. First one, automobiles full year sales expectations, 4.5 billion units, 6.5% down. And in major market, in China, it is going to be higher than last year, but not in the U.S. and Japan. And what is the details of the ups and downs of those figures and preconditions? And then what is the key for you to help the recovery of the market? And how -- what is your outlook on the market now?

And second question, if I continue, your forecast of the revenue full year is going to be JPY 25 billion profit. And would that be driven by the motorcycle businesses? Like in the first quarter, how do you -- how can you say that you can ensure the profit for the full year expectations?

[Matt Watanabe, executive]

The question is the forecast of automobiles, 4.5 million units, that is 6% down from last year. And then what is the increase or decrease from last year in China? What is the key for the recovery? Those are the questions.

And the second question is the revenue forecast full year, JPY 200 billion. Operating profit for the full year expected, will that be driven by the motorcycle businesses, like the first quarter? What is the factor behind profit expectations?

[Seiji Kuraishi, executive]

So let's start with the automobile forecast. And then Takeuchi-san will follow me later about profit.

So our forecast of automobiles businesses, we look at the infection situations, pandemic situations and the sales situations in different places now, and the things are uncertain still today. And as of now, major market for automobiles are: China, that's ours; and the U.S.; and Japan as well, and those are our main share markets for automobiles for us. And those are the recovering market as of today.

And the major ones are China, the Chinese government have decided to extend the preference policy for the cars of those clients and also the number plates also well supported so that we can now see those reduction being less and less today. And it was [ 390 million ] -- 100,000 before, but it is going up and then AWDHAC and GHAC, in both of the facilities we have, have marked the record highest production so far. And for instance, Guangzhou, 125%, 40,000-or-so and Dongfeng Honda, 60,000 units of production and so on, that's also the record, and we achieved the recovery now. And we have a plan to launch new models. And I think in this calendar year, we will try to hit the same level last year and a higher level next year.

And in China, in April because of the COVID-19, many dealers had restricted activities in the plant. We had lockdown situations from the end of March to the early May. All of the plants were shut down, and we had more than -- well, 50% less activities the first quarter. However, now we have resumed the operations. And then now, we have come to the level of 80% of the last year level.

And from end of May and so on, we are now seeing the COVID-19 situations coming up again, and there are some restrictions in the different provinces because of that, and we need to keep an eye on the pandemic situation so that we can regulate our resumption of the plant operations.

And in Japan, immediate period, I would say there's recovery trend. However, looking at the COVID-19 impact on the economy, we expect the level below the last year, to be, for instance, 4.5 million, actually supported mainly by U.S., Japan and Asia, though the number of the units are not many. However, in India, Indonesia, for instance, we don't see the COVID-19 impact, not certain yet in those countries, so we have to keep an eye on those small countries as well.

But anyway, we need to keep an eye on the pandemic situations, at the same time, to try to do activities to ensure our sales in different markets. Thank you.

[Kohei Takeuchi, executive]

And first quarter, we had JPY 11 million negative, and then we had JPY 200 billion to -- that's profit to expect. I think, in the first quarter in sales, we have a less -- 60% fewer unit sales. However, even that, we have a structure to ensure the same level of the profit. And second quarter onward, if the COVID-19 impact diminishes, I think we can drive the profit. And for the automobiles, we have 40% less unit net sales to expect. And then, because of that negative situations, but even that, from the second quarter onward, we are -- we expect some recovery, which will help the profit as well.

And because of the asset situations, actually, some of the segments are categorized as the finance services. And then that is to help the consumers to be able to buy the cars easily based on the captive finance mechanism. And those are the financial services-based profits, which will be, of course, will be the part of the profits in the second quarter and so on. And then a JPY 20 million expectation is to include all of that. Of course, the motorcycles are strong, but automobiles recovery will be included in our expectations of JPY 200 billion.

[Matt Watanabe, executive]

Asahi Shimbun newspaper, [ Kamija-san ], please.

[Unknown Attendee]

About the impact of COVID-19 pandemic, as a premise, well, the impact of the second wave, what is the assumption that you're making in terms of the second wave impact? In addition -- well, SG&A, there is an add-on. Can you talk about the reason why you think SG&A is a positive, including teleworking?

Now about Q1, the operating profit compared to motorcycles, automobiles are in a very tough situation. What's the current situation? And in order to improve this, what measures are you taking that is to improve the operating margin of the automobile business?

[Matt Watanabe, executive]

In regards to your first question, it was about the COVID-19 impact. What is the assumption you're making for the impact of the second wave? And you say that SG&A was a positive, but what are the positive factors?

And second, about the automobile, operating margin is being challenged. Why is that? And what are the initiatives you're trying to take to improve this, please?

[Unknown Executive]

About the second wave. Well, it's very hard for us to predict what will happen, but the budget -- in the budget, we have assumed that we will see in the different regions -- we will observe what is happening in the different regions. And based on that, assume what will be happening.

And in regards to China, I think that we will see the results to be equal to or better than last fiscal year. U.S., 80% to 90% recovery is the assumption that we made for the budget compilation. Japan, also, we are assuming a 90% recovery, more or less. These are the preconditions for the budget. Meanwhile, Asia, well, Asia, the COVID-19 situation is very hard to read. And therefore, we have to look at what is happening now and try to be on the safe side in forecasting the unit sales.

Well, it's very hard for us to predict what will happen regarding COVID-19, but -- well, the biggest impact we saw in the first quarter was due to the lockdown. Production marketing was totally suspended, and that was the most difficult thing that we had to cope with. We saw, as a result, the drop in sales and unit sales in this lifestyle. With the coronavirus, we have to think about what will happen. But if the current situation were to continue, we think that the situation will not get that worse. But it will, at the same time, take time to recover to what we saw in the past, and that is the permit space in which we compiled our budget.

About the automobile profit, how we have made the SG&A positive. Well, within SG&A, in line with the unit sales, the money changes, how much we spend changes and with the drop in unit sales, and we have seen some of the costs go down. And we -- the money that we were spending on production and R&D was spent to try to make a recovery from the COVID-19. So as a result of all these steps that we tried to take, we have seen a reduction in cost.

Now about the initiatives taken to improve automobile profit, nothing really is going to change drastically. But instead, we are going to try to continue to improve production efficiency. Also, we will try to improve R&D efficiency. All these things that we've been doing in the past will continue to be implemented.

Now from April, automobile operations, our organization has been strengthened. R&D also has been strengthened. But it's only 6 months or so, and therefore, speed-wise, because of the impact partially of COVID-19, we understood that we need to reform, change things. And so this has been a driver to try to bring about change. And therefore, by doing the things we've been doing in the past, we believe, for sure, that we'll be able to improve. Thank you.

[Matt Watanabe, executive]

Thank you. Next question, from TOYO KEIZAI, Mr. Kishimoto, please.

[Keiji Kishimoto;TOYO KEIZAI;Reporter]

My name is Kishimoto, from TOYO KEIZAI. Can you hear me?

First question about motorcycle businesses in India and in Indonesia, in emerging markets, motorcycle businesses in the light of COVID-19 and infection situations, there may be a greater concern about the recovery of the sales. And how do you see that situation?

Second question, as of now, you're pushing forward the reorganization of the production structures for the automobiles and for the improvement of the profit. And are there any impact on that schedule by the COVID-19?

[Matt Watanabe, executive]

Thank you for your question. A repeat of the question. There may be a concern about sales recovery due to the COVID-19 in emerging market for the motorcycle businesses. How do we see the situation? That's the first question.

And second question about automobile production system and its restructuring. And are there any impact by the pandemic in terms of the schedule?

[Unknown Executive]

So for the motorcycle businesses and in India and Indonesia, there are sales slowing down because of some factors. One is COVID-19 infection still going on, not resumed at all. And also, specifically in India and in Indonesia, the financial system is like such that the government for instance have the term for the financial returns being delayed by the government schemes. And because of that, there are some serious delays about those payments, and quite a few customers for motorcycles may use the financing schemes. And in some cases, those customers are not able to get finance enough to buy the motorcycles.

And coronaviruses, it is difficult to predict. However, looking at the worldwide situations now, there will be a recovery containment some time. However, in the financial scheme areas, we are trying to come up with the financing scheme that's suitable for the emerging markets going forward that will help the recovery someday.

But in India, for instance, as I said, OEMs, other companies also offer the discount, and we are a top manufacturer of the motorcycles, and we don't want to be involved in the discounting competition. Rather than that, we like to offer new financing schemes for them in order to maximize the sales over there.

On one hand, Vietnam, Thailand, those are quite good countries with good profits. And there are less impact of COVID-19 in those countries. Therefore, if you look at the Asian areas -- on the whole, it may take time, but it will recover some time. And to be honest, we don't want to be too hasty in trying to get recovery over there.

And in terms of the automobile manufacturing structures, CMI in Japan and HUM, Turkey, HUM of the European area, in those plants have been a part of the restructuring of the automobile production system, and there will be no changes, no major changes to them. No schedule changes, too.

[Matt Watanabe, executive]

Next question, [ Imamura-san ], from Sankei Shimbun newspaper.

[Unknown Attendee]

Can you hear me? My name is [ Imamura ], from Sankei Shimbun newspaper.

Well, in regards to the tie-up with China's CATL, can you explain about the aim? And are you going to hold a stake in CATL? Are you going to mutually hold stakes? No, I think -- so what is the reason why you've entered into this alliance, strategic alliance?

And in regards to China, the political situation is changing. And though this is a different sector, the United States, they are taking strict measures against companies which are using Chinese products, and I think that the approach to China is being questioned.

In the mid- to long-term, how are you going to approach the Chinese market?

[Matt Watanabe, executive]

Thank you very much. Now about your first question, we made the announcement the other day that we are going to have a capital tie up with China's CATL. And it's only Honda that is investing in CATL. It's not a mutual investment. So what is the reason for this? Was the first question.

And second is in regards to this Chinese political situation. Things are changing politically in China. And therefore, in Honda, in the mid- to long-term, how are you going to approach the Chinese market? Please answer these questions.

[Unknown Executive]

About CATL, the relationship with CATL, well, we originally, in China, had a long relationship in terms of battery supply. CATL has a high level of technology and competitiveness and is the top supplier of battery. They're the largest battery supplier for us. And therefore, I think that they're an important partner for the electrification of Honda.

With regard to CATL as such a strong partner, and that is the reason why we decided to invest in CATL. In promoting capital electrification, we want to create synergy with CATL, and that is the reason why we decided on this tie-up. And in many ways, we want to continue to collaborate with CATL, so as to promote electrification and try to achieve our electrification goal. And we believe that CATL is a very strong partner to make this happen.

And next, about the political situation in China. Well, I worked in China in the past. Back then it was not U.S.-China, but Japan-China had a lot of problems. And this is not something that just started today. Instead, in the past, China has been and will be the largest market in the world, and it's a growing market. And therefore, we will work with China just as we've been doing in the past.

Well, I think that there will be a number of things happening in the future. And if we want to keep an eye on what is happening and act on a timely basis. Currently, when I was in China, because we had soured bilateral relations compared to now, it was difficult for Honda to do business in China. But nowadays, well, politically speaking, Japan and China are in a very good situation. And therefore, I think that -- I think, compared to the past, at least, so far, at this point in time, things are heading towards a good direction for Japan.

But including the political situation, things change day in, day out, and we have to act on a timely basis. I think that's important in doing business in China. That is all. Thank you.

[Matt Watanabe, executive]

Because of the interest of time, the next question is going to be the last one.

[ Mr. Simo Sato ], from Yomiuri newspaper, please.

[Unknown Attendee]

[ Simo Sato ], from Yomiuri newspaper. So change of the topic in a way. Because of the coronaviruses, now people are paying attention to more -- to the internet-based sales. And do you have any idea or any engagement of those areas as per different regions?

[Matt Watanabe, executive]

So region-based internet sales, that was the question. What we do today and our policy going forward, that was the question.

[Unknown Executive]

In the respective regions, we have a variety of the actions in place. For instance, in the U.S., from last year, the internet-based sales have been put up. We now have a model to push. And then in April this year, because of the lockout situations, customers were not able to come to the dealer shop. Because of that, we had a quite a good internet-based sales, it increased. And we like to put more efforts on that too. Same-store in China, internet-based sales will expand going forward, and we will be getting ready for that as well.

And in Japan, well, some dealers have that system in place. However, as Honda, we haven't started really about internet-based sales system in Japan, but we will consider for that because of the coronavirus, the situations of the day. Thank you.

[Matt Watanabe, executive]

Thank you very much. So I apologize the limitation of time. And for the questions we are not able to answer today, we will get back to you later by our Corporate Communications Department.

Now we would like to conclude our press conference for the financial results and later -- and the information are available on the Honda website. And thank you very much indeed for your participation.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]