And we have solidified our foundation to achieve that vision finally. And in terms of the yen depreciation situation today, of course, we are in manufacturing our businesses and we rely on the facilities and the equipments heavily. Therefore, abrupt changes of the forex is not really welcome. But recently, of course, it is related to the policies of the U.S. and Japan government, Bank of Japan’s initiative, U.S. counterparts when they’re going to move to reduce the rate and so on. Of course, they’re all related. And then the fundamentals behind such ups and downs of the Forex situation today is actually related to the actual demands for the yen currency. I think that is my thought. And through actual demands for the yen today will be related to the export of — from Japan because it was export oriented so far, I believe.
But now in this situation, we would have a more internal domestic demand, meaning that we could repatriate our manufacturing care businesses back in Japan. And then Japanese stocks. The share price is now appreciating too, reflecting that, that probably indicates that demand for yen will be improved going forward. And then our expectation or assumption is JPY 140 for the time being in this budget. You might take it a quite conservative parts. And the reason behind JPY 140 is maybe in the first half, it will be something like JPY 145 for dollar in the first half of the year. And then in the second half, JPY 135 because of the interest rate changes and so on, that is expectations. But in the long run, as I said before, the power of the Japanese businesses will be appreciated better with a better actual demands within Japan.
Therefore, it will not go to JPY 150 or JPY 160. I don’t think it will be the case. However, of course it is not possible to project. However, the after changes of the currency is difficult for us in the April-May situation of the Forex is not really favorable to us. However, we have to adapt to the changes out there in terms of how we operate every day basis. Thank you very much.
Operator: Nikko, Japan Automotive Daily. Mr. Misododi. Mr. Misododi, please.
Unidentified Analyst: This is Mr. Misododi Japan Automotive Daily. Can you hear me?
Toshihiro Mibe: Yes.
Unidentified Analyst: I have 2 questions. First, FY ’25 forecast about this forecast, operating profit increase. You say the selling price and cost impact is a positive of JPY 502 billion. Can you give the breakdown any relation to that, I want to know about the price increase impact, I think it was positive of last fiscal year. As the price increase itself, has it completed the cycle? Or is it the case where this fiscal year, again, you want to continue and try to increase the profit to the price increase. That’s the first question. And the second is about the business in Japan. In FY ’25, you forecasted that is 660,000 units. I think you said that and to be with in Japan, your annual unit sales is around 700,000. I think that’s more or less the target.
But the shortage of semiconductors has ended. And I think the fact that you cannot reach 700,000. What is the reason? And also to Mr. Mibe, once again, how do you position your business in Japan? Can you explain about that as well?
Eiji Fujimura: Allow me to about the operating profit and increased decrease. And there is an impact of about JPY 502 billion. And what is the breakdown of this? That’s your question. But I think that was mentioned earlier. But in Japan and the United States has an increase in labor cost, I think this is true for the suppliers. And so this is included. We want — we have been working to increase the cost together, and we can reflect this in our motorcycle business. So we have offset that. But mainly, it’s a selling price, a positive impact of the selling price, it’s about JPY 407 billion or — well, the inflation part, well, we have to try to introduce competitive products to increase their price. But there are some special factors included in the United States with the upcoming electrification and dealers, and we, the manufacturers, we have to change the roles that we play.
I think that we have to factor in this change. The dealer margin, therefore, on our part, we have done a lot of consultation. And we would have reduced the dealer margin. In other words, the dealer is — the profit was allocated to the dealer has been allocated to us. All the new car business, it will be like that, but in the future, the maintenance and those parts, there’s a touch point for the customers, the dealers will be a very strong business partner for us. So that will continue to be the case. So that profit within the JPY 407 million, I think about JPY 100 billion is included. And therefore, that is — if you subtract that, there will be the price increase, and that has been budgeted. Meanwhile, recently, North America, especially, we have been reducing our inventory and we tried to reduce the incentives.
That’s our operation. But prior to — well we have not yet reached the level of the prior to COVID. I think that the competition is more fierce these days with the competitors. And therefore, we have to budget more than the incentive. And in the operation, the pricing and instead we are trying to reduce this and hold this down, but we have to offset where needed. So JPY 500 billion, this is a large number, but these factors are included here. So please understand this number to mean that. And this fiscal year, that we can continue to raise our price, as we said earlier, we have to comply with the inflation also introduce appealing products and try to tap on these strengths that we have. That’s all. About business in Japan. Mr. Aoyama will first.
Shinji Aoyama: Yes, 700,000 has been the benchmark in the past. That is 2. So 700,000 units. And at one time, we were starting that much, and so that was regarded as more or less the benchmark. So you are correct in saying so. But in the mid- to long term, we think that the Japanese automotive market is declining. Unfortunately, we have to make this overall. And therefore, FY ’25 as well, the market is so there will be a marginal increase. And that is how we look at it. And so we have the — and 655,000 units listed here, but the registration is about 700,000 units. As for the share wise, if you calculate this in different share the fiscal a 15% or so is what we’re aiming towards. And therefore, 15% share is what we want to get.
And this is the highest in history. So this is a plan that we have. Already we are receiving bookings terms of levers and the new free before launch, and we want to so also in addition to that, at the year of last fiscal year, we launched WRV, so this product aseisminor market chain. So all these included, we want to introduce competitive products so as to achieve this 50% high share. And that is how we are looking at this fiscal year. And I’d like Toshihiro to talk about our position of Japanese business.
Toshihiro Mibe: But looking at the current situation as Aoyama has already explained about the beginning of this year, at CES, we unused 100 well, this is a new EV, and this also within the global market, we want to introduce this to Japan at the global market. The product line also the entries included, we have the smaller events, and we are shifting more to the smaller size model. But — and therefore, this is one of the reasons why we’re seeing the increase in the unit value. Electrification is a keyword that we’re using. This is a new direction that we’re moving to. So this is a good opportunity for us. And within this process of electrification once again. Of course, we are a Japanese company based in Japan is the Japanese market is a very important market for.
And therefore, in addition to what we’ve done in the past newly, we want to do a new lineup so as to be able to raised our appeal of Honda in Japan. Currently, we are working on the details, and therefore, we cannot make any numbers today, but it will not be the same as the past. And that is as far as I could say for now. But please expect that we will be making changes and look forward to our strategy in Japan. Thank you.
Operator: [Indiscernible]
Unidentified Analyst: I have 2 questions. Can you hear me?
Operator: Yes.
Unidentified Analyst: So the away from the financial results because of the president being here, I’d like to ask this opportunity — as of today, what is the area — or do you think about the status of the battery markets and Honda’s position today in terms of your negotiation with the other companies and the development and sales plans of that. These as our front view on that. And as will be a Canadian plant, for instance, recently, full your EV sales goal, for instance, you have today, you’re probably having these steps done absolutely, but other companies are facing with EBITDA but decelerating trend of the EVs and also discount are also being seen in competitive markets. In that BEV slowing down as ended today, reminding that do you think it is a kind of good time for you to take advantage to accelerate yourself away from others being so those situations?
Or do you think you have to accelerate further the businesses you have today? What is your position today of your company in the current EV situation? And the second question is about collaboration potential with Nissan. I understand it is still under consideration, but I’d like to ask Mibe on what is the topic that you’re talking about with them today in the depreciation process, maybe as passion could you share with us? And in the topics with them, would you talk about EV sales tools and so on, maybe you would tell us about it in the business update opportunity, but do you have changes on your strategy so on after — with regards to their talks with them.
Toshihiro Mibe: For the first question, about our businesses. The EV demand is a little bit down according to what you said that, of course, it is what is what we are seeing today globally. But since I became the President, our goal is to achieve 40% by 2030 and 80% in 2040, 100% FCEV or BEV by 2040. And of course, that is the kind of back testing goal based on the CN in 2050. And it’s been — 3 years since I became president and those goals still stand, no change at all. So for the goals over 2030 and 2035. Of course, EV-related regulations on all the different countries might change as we go toward those years, and that was something we were expecting already, and this is what we experienced today, for instance, to achieve 2 million cars in 2030.
And we’d like to establish the foundation for that business is in order to be able to achieve it. And then we are making plans now including the investment and plans as well. And current — based on the current ratio, we still keep obvious with our original strategy, no change. And in terms of the investment, maybe the opportunities, the timing of the investments of those might be a little bit shifted within the range that we would anticipate. But there is no change to the goal, no strategy changes at all. And in terms of the hybrid, it is a good technology as a tentative solution, and we have the businesses of that today with hybrid that we are not — we are not denying the hybrid business at all. But after 2030, the global regulations and so forth would require the battery EVs for sure in order to capacity.
And then we have been working on the small mobilities today. The battery EVs could be the best solution for those small mobility ones. And then we have to outsoles one after another, and we like to take on achieving those steps as we go. And with regard to the collaboration with Nissan, we have announced it on the March of 15. March 15. And since the time we had frequent discussions between the 2 companies with the different groups of people. And then as was announced by the Mr. Uchida of Nissan, the other day, actually, I’ve checked the progress, participating some of those meetings. And what sort of values can we provide by this collaboration? We are actually discussing about it right now, and I cannot disclose what is being discussed at the moment.
However, we are coming to a good conclusion nearly. And one that is well summarized, we can share with you. And as we said on the March 15, basically, it will be in the area of electrification software and also complementary product supplies and so on. And for the growth in the future, it will be the electrification software those 2 will be very important for the growth purpose. And then software, especially with AA included and the semi-connector together, the development cost will be enormous, and that name is one of the potential collaborative near and also for the scalability for the electrification. Scalability can be quite advantageously obtained with the collaboration I suppose with the electrification efforts. And then we are having discussions closely on those points.
And once we find and identify the benefits, we will start working together. And I cannot give you much today. However, we are having discussions in their broader scopes in front of us. And on the 16 of this month, I don’t think I can give you the clear answers were the discussion items we did today. But of course, the discussion will not go forever. Sometime very soon, I can give you some ideas about beer collaborative talks, with 2.
Unidentified Analyst: So by summer, maybe can you give us the kind of a first run of the sharing with us of the information by summer time. What is your goal?
Toshihiro Mibe: I wouldn’t think it would be until the end of this year but long summer time. Maybe by then, I’d like to come up with some sort of idea that we can share with you. And that is what a bank, and we will focus on the discussions really let us do that, of course, including whether or not we go for that would not go for that. We will be able to summarize the talks sometime very soon.
Operator: Apologize, but in the interest of time, next will be the last question. [Indiscernible]
Unidentified Analyst: [Indiscernible] But North America, your automotive business is when the unit volume is increasing. Because of the foreign exchange rate, is it because the selling pressure has been reduced because of the extra rate? Or is it because people returning from EV? What is the reason for the increase in unit volume.
Unidentified Company Representative: The reason why we’re seeing an increase in just volume by profit, I understand. But exchange rate is one factor, but it’s not the case where the exchange rate is a dominant factor, especially in 20 — FY ’24 results. And looking at the FY ’24 results, FY ’23 was the time which due to the semiconductor shortage and we cannot fully some life, we cannot fully produce. And so that was the situation, therefore, FY ’24 or FY’25 as well. North America, the factory utilization rate is — well, 100% or even slightly more than 90%. That is the utilization rate at the U.S. factories. And therefore, as a result, we are being able to raise the price, selling price in line with the appeal of our products.
I think that this is a major contributor. Plus, there was also — as I’ve answered in a separate question. Hybrid, after the 23-month year, the performance is increased and also the business competitive reasons increased, including cost. And therefore, the profit rate ratio is equal to ICE. But in terms of the profit amount, it is slightly more. So that included hybrid is doing very well. And so further boosting our profit.
