1. Intense competition. Honda faces more intense competition than ever. New small entrants are disrupting the market with their capabilities in producing electric vehicles or alternative fuel engines. Big companies are restructuring themselves to become more efficient.
2. Decreasing fuel prices. Some analysts forecast that future fuel prices will drop due to extraction of shale gas. This would negatively influence Honda.
3. Rising raw material prices. Metals are the main raw materials used in vehicle and motorcycle manufacturing and the rising price of the raw metals raises overall production costs for Honda.
4. Natural disasters. Honda has manufacturing facilities in Japan, Thailand, China and Malaysia. These countries, including others, are often subject to natural disasters that disrupt manufacturing in the facilities and decrease Honda’s production volumes.
5. Strong yen. Honda earns most of its profits outside Japan and appreciating yen poses a great threat to Honda’s profits.
6. Government policies for the automobile sector across the world
7. Ever increasing fuel prices
8. Intense competition from global automobile brands
9. Substitute modes of public transport like buses, metro trains etc