Unprofitable Imports Alter Honda Product Plans

Even though 85 percent of Hondas sold in North American are built on the continent, the strong yen is hurting the company's Japanese exports to the point where Honda is losing money on them. Imports from Japan include the Acura TSX, the CR-Z and Insight Hybrids, some versions of the CR-V and the Fit subcompact. Honda CFO Fumihiko Ike told Automotive News that the Fit makes no profit when exported to the United States, but Honda feels that it's an important car for dealers to sell and as a means of luring and retaining younger customers. Honda, like other manufacturers, is planning on shifting even more production to North America. The Acura ILX is being built in Indiana rather than the planned Japanese site. The ILX Hybrid is the only hybrid product built by Honda in North America, as Honda is far from the 100,000 units per year needed to make North American production worthwhile by roughly 69,000 units. Rival automakers like Nissan and Toyota still build 70 percent of their vehicles in North America, and are scrambling to catch up to Honda's figure. But for dealers, developments like Mexican production of the Fit can't come soon enough, especially with government incentives for small, fuel-efficient cars in Japan boosting demand for the Fit, further straining stateside allocation. from The Truth About Cars http://www.thetruthaboutcars.com

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