HMC
Honda Motor Co., Ltd.
Is HMC Halal?
Automobile and motorcycle manufacturing with a substantial captive-finance business — the current consolidated asset and activity screens fail.
What You Should Know
Honda Motor Co.'s March 31, 2026 Form 20-F reports assets of ¥33,509,285 million, financing liabilities of ¥13,479,863 million, cash of ¥5,066,828 million, identifiable debt securities of ¥159,754 million, receivables of ¥11,163,972 million and fiscal-year sales of ¥21,796,610 million. Debt/assets is 40.23%, liquidity/assets is 15.60% and receivables plus cash/assets is 48.44%. Honda Financial Services revenue is ¥3,529,400 million, 16.19% of sales, and disclosed interest income is ¥179,466 million (0.82% of sales). The consolidated asset and captive-finance activity screens fail.
⚠️ Concerns
- •Debt/assets is 40.23%, above examined 33.333% limits
- •Honda Financial Services revenue is 16.19% of sales and includes retail lending, leases and dealer financing
- •Conventional insurance activity requires qualitative review
- •Receivables include the captive-finance portfolio
- •No universal prohibited-activity percentage is asserted beyond the documented segment proxy
Current quantitative Sharia screen
Based on 20-F figures for the period ended 2026-03-31; calculated 2026-07-15.
13,479,863 / 33,509,285
5,226,582 / 33,509,285
16,230,800 / 33,509,285
179,466 / 21,796,610
- Financial
- Fails
- Overall
- Fails
Debt/assets is 40.23%, above the examined limit; liquidity/assets is 15.60%, receivables-plus-cash/assets is 48.44% and disclosed interest income is 0.82%. The captive-finance activity screen also fails.
- Financial
- Fails
- Overall
- Fails
Debt/assets and receivables-plus-cash/assets exceed the examined MSCI limits; the documented captive-finance activity screen fails independently.
- Financial
- Fails
- Overall
- Fails
Debt/assets is 40.23%, above the examined Malaysia limit, and financial-services revenue is above the 5% activity benchmark. This is not an official classification.
- Financial
- Not calculated
- Overall
- Fails
A licensed historical market-cap series is not stored; the consolidated asset-based and captive-finance screens already fail.
Business-activity disclosure
Honda's automobile, motorcycle and power-products manufacturing is generally permissible, but its financial-services business provides retail lending, leasing, dealer financing and related insurance. Financial-services revenue is 16.19% of consolidated sales, above the examined 5% activity benchmark, so the business screen fails on documented captive-finance exposure.
Limitation: The filing does not allocate every financial-services stream between interest, lease, insurance and other revenue under one universal prohibited-activity taxonomy; the segment revenue is used as a conservative lower-bound activity proxy.
Purification
Honda fails at the documented captive-finance business-activity level; disclosed interest income is shown as a screen input, not as a scholar-specific purification prescription.
Inputs, assumptions and primary sources
- Amounts are JPY millions from Honda's March 31, 2026 Form 20-F.
- Debt uses consolidated financing liabilities of ¥13,479,863 million, including Honda Financial Services funding.
- Cash is ¥5,066,828 million. Interest-bearing securities use disclosed debt securities of ¥159,754 million; equity securities and derivatives are excluded.
- Receivables combine trade receivables and current and non-current financial-services receivables; fiscal 2026 sales revenue is ¥21,796,610 million.
- Financial-services revenue is ¥3,529,400 million, or 16.19% of sales, a documented lower-bound proxy for captive-finance activity. Disclosed interest income is ¥179,466 million, or 0.82% of sales.
This is a reproducible financial screen, not a fatwa. A failed total-assets screen can coexist with a pass under a market-cap methodology. ZakatInvest keeps the qualitative assessment separate so numerical thresholds do not erase material context.
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