Honda ready with big and small, hopes to win in US
Honda is ready to offer bigger vehicles in North America should demand return for such models, as well as the small cars viewed as the Japanese automaker’s forte, a senior executive said.autos Updated: Jun 11, 2009 14:36 IST
Honda is ready to offer bigger vehicles in North America should demand return for such models, as well as the small cars viewed as the Japanese automaker’s forte, a senior executive said on Thursday.
Honda Motor Co. Executive Vice President Koichi Kondo said working to please the customer has been “a basic company stance” over its half-century history in the US market. Honda reached its 50th anniversary in the US on Thursday.
What’s so difficult to predict is whether American consumers will revert to their old tastes, he said in an interview with The Associated Press at Honda’s Tokyo headquarters. When gas prices dropped after a surge in the 1970s, Americans returned to buying big models, said Kondo, who headed Honda’s US operations from 2003 to 2007.
“It’s difficult to see who will emerge the winner, but we want to be a winner,” he said of the troubled U.S. industry, which has seen General Motors Corp. and Chrysler LLC file for bankruptcy protection.
For now, Honda is focusing on smaller fuel-efficient products like the Insight hybrid, which has been a hit because of its affordable price of $19,800 in the US and 1.89 million yen ($19,300) in Japan cheaper than Toyota Motor Corp.’s Prius, the global top-seller.
Honda is promising a sporty CR-Z hybrid for early next year in the US, European and Japanese markets, which Kondo said would cost more than $20,000. A hybrid version of the subcompact Fit will follow, he said.
Kondo said he was pushing his engineers to further cut costs for hybrids by several hundred dollars per car and boost mileage by 10 percent to make the ususally higher pricing of a hybrid worth it for the consumer.
Honda _ which makes motorcycles, the Asimo human-shaped robot, as well as Accord sedans will focus on a limited number of global models to achieve cost savings by producing more of each product, including hybrids, he said.
Kondo said Honda hopes to reach 500,000 hybrid sales around the world in the next year or so.
Kondo said there were some signs the US auto downturn may be bottoming out, but he said a full recovery could not be expected for another couple of years.
Like other Japanese manufacturers, Honda has been battered by the global slump and the strong yen, which slashes overseas earnings. But it has fared relatively better than bigger rivals Toyota and GM.
Analysts say Honda can stage a recovery, partly because it has a strong motorcycle division. Honda has less excess production capacity in Japan, and has a better lineup of small energy-efficient models than its competitors, they say.
“Honda’s earning power is proving resilient,” said JP Morgan analyst Takaki Nakanishi. “Honda is reaping the benefits from the speed and diligence with which it is matching its corporate structure to the changing business environment.”
Kondo who has worked for a decade in the US, about a quarter of his 40-year career at Honda acknowledged that staying nimble was a challenge as Honda grew. What it needs to remember is its roots as a tiny newcomer in the US, he said.
When Honda started selling the Civic hatchback in the US in 1973, it made a major error because it wasn’t prepared for the car body rusting from antifreeze salts on winter roads.
It exchanged all the damaged parts, although that cost more than all of Honda’s group profits then, and that won respect from dealers and customers, Kondo recalled.
“It may sound like we’re trying to sound cool. But the reason Honda is where it’s today is because we’ve always sided with the customer,” he said.
Today, it sells and makes more cars in the US than in Japan.
“We are an American company,” Kondo said.