Honda Says Civic Has ‘Ammunition’ to Hang On as Top Compact Car

By Alan Ohnsman - Mar 13, 2012

Honda Motor Co.’s Civic, stung by critical reviews and tight U.S. supply in 2011, has outsold rival small cars and the company has enough “ammunition” to hold the spot, an executive said.

U.S. sales of Civic sedans and coupes rose 45 percent to 48,970 in the year’s first two months, ahead of Toyota Motor Corp.’s Corolla, a perennial challenger, and General Motors Co.’s Cruze. After supply disruptions last year, Honda now has enough North American capacity to make Civic the top-selling compact, even if that isn’t a target, said Tetsuo Iwamura, chief operating officer for North America.

“When competitors shoot at the Civic, we’ll have enough ammunition to shoot back,” Iwamura said in an interview this week at Honda’s U.S. headquarters in Torrance, California. “We don’t talk about No. 1 as a goal. Always we think about having very good acceptance and high customer satisfaction.”

The car that’s been the core of Honda’s U.S. business since 1973 hasn’t led compact sales since 2002. Civic trailed both Corolla and Cruze last year, according to Autodata Corp., a Woodcliff Lake, New Jersey researcher. A year after an earthquake and tsunami damaged Tokyo-based Honda’s parts supply base and engineering center in Japan, the carmaker has ratcheted up North American output of the model 69 percent to regain sales in the U.S., its biggest source of revenue.

Honda has gained 32 percent in Tokyo trading this year, recovering most of the drop last year, when the stock fell 27 percent. It last closed at 3,100 yen.

Output Increased
Honda made 84,678 Civics at plants in Canada and Indiana in the first months of the year, up from 50,056 in the same period a year ago. Production of all Honda and Acura cars and light trucks in North America jumped 36 percent to a record 301,564, according to the company.
Civic sales fell 15 percent last year to 221,235, the lowest since 1992. Along with parts-related production delays, the 2012 Civic LX sedan failed to receive the “recommended” status its predecessors had from Consumer Reports last August. The magazine faulted the car for a decline in interior quality, choppier ride and road noise.

Higher U.S. gasoline prices are benefiting Civic, and should buoy demand for at least another four months, said Jesse Toprak, industry analyst for TrueCar.com.

“It’s got a pretty good chance of being No. 1 this year, owing to the availability and the price point,” said Toprak, who is based in Santa Monica, California. “They are a bit lucky that the fuel prices are rising now as Civic continues to be viewed generally as more gas-efficient, and a safe choice.”

Fuel Price
The average price for a gallon of regular unleaded gasoline has increased 16 percent this year to $3.81 as of March 12, according to AAA, the largest U.S. motorist group. The Civic coupe has a starting price of $15,605 while the sedan’s price starts at $15,805, according to researcher Edmunds.com.

The outlook for Civic beyond July, when fuel prices may ease, will depend on updates of the car Honda plans to make to address some criticisms and competing models including Hyundai Motor Co.’s Elantra, Toprak said.

“Hyundai, in particular, has shown that it has the ability to replicate the kind of success seen with Honda and Toyota a generation ago,” he said.

Even with some unfavorable reviews for the current Civic, the car continues to attract the buyers competitors seek, said Alexander Edwards, president of the automotive division of Strategic Vision Inc., a San Diego-based consumer-research firm.

How Competitors Fare
Within the small-car segment, Civic is “still grabbing a younger, somewhat wealthier crowd,” Edwards said. The median age of its buyers is 45, compared with a segment average of between 49 and 50 years old, he said.

Volkswagen AG (VOW)’s Jetta draws a younger customer, with a median age of 41, because of its cheaper base price and Hyundai’s Elantra matches Civic with a median buyer age of 45, said Edwards, whose firm surveys 300,000 people a year for its automotive studies. Jetta’s starting price is $15,515, according to Edmunds.

The average Corolla buyer is 49, while the median age for customers of Ford Motor Co. (F)’s Focus is 53 and Chevrolet’s Cruze is 58, Edwards said.

GM’s data indicate that the average Cruze buyer is about 53, Jim Cain, a company spokesman, said in an interview.

Honda’s problems last year didn’t keep it from a top- ranking spot in terms of brand consideration, with 50 percent of people in the market for a new car saying they’d consider it, Edwards said, citing Strategic Vision data.

Inventory had a bigger impact on Civic sales last year than Consumer Reports’ review, said Iwamura, 60, who becomes Honda’s executive vice president on April 1 and will continue to lead North American operations.

“I accept their criticism very sincerely, but yet believe we’ll be able to make them once again a strong fan of the Civic,” he said.

Source;
http://www.bloomberg.com/news/print/2012-03-13/honda-plots-u-s-civic-rebound-buoyed-by-supply-abundance-gasoline-prices.html

Motortrend: We Hear: Honda Profits Down at End of 2011, Better Sales in 2012?

Things are either looking down or up for Honda, depending on how you look at it: the company’s operating profit may have been down 65 percent in the last quarter of last year, but it is promising a sales bump in the coming fiscal year, starting April 1.

Honda’s operating profit was just 44.3 billion yen ($581 million) in the last three months, drastically below where industry analysts said it would be. It now projects that it will end the year with an operating profit of 200 billion yen ($2.62 billion). It’s about 35 percent lower than Honda’s own estimate that it released sometime in August.

There are a number of factors behind these numbers, but chief among them is the one-two punch of the Japanese earthquake and Thai floods that rocked east and southern Asia. Honda was, without doubt, the hardest hit of the three Japanese automakers — the company estimates it lost the production equivalent of 260,000 cars in the quake and flood. Meanwhile, both Toyota and Nissan returned to full production much earlier than Honda, and have regained market strongholds in the months since both natural disasters happened.

Honda executives haven’t backed down, however, and said that they were bullish about this calendar year. The company predicts a 25-percent increase in sales in North America alone over the calendar year 2011. The goal sounds ambitious–and it is–but a 25 percent increase in American Honda and Acura sales would put the company at about 1.43 million units this year, or bring it back to 2007-2008 levels. It must also grapple with big currency fluctuations — at the end of 2007, the best of Honda’s last five years, one dollar bought 112.64 yen; at the end of 2011, its worst of the five years, that dollar only bought 77.63.

One bright spot? Honda promises that it’ll complete the all-important refresh of the current Civic this year, either to be debuted late this year or early next. We’ll have to see if it spells more sales for the embattled company soon.

Source;
http://wot.motortrend.com/we-hear-honda-profits-down-at-end-of-2011-better-sales-in-2012-163843.html

Honda to spend $98 million to build CVT parts at Ohio plant

During trial production, two of Honda's advanced continuously variable transmissions undergo leak testing on the new assembly line at Honda's plant in in Russells Point, Ohio.

DETROIT -- Honda today said it will invest $98 million at its Anna, Ohio, engine plant to build pulley components for the company's continuously variable transmissions.

The CVTs are part of Honda's next-generation powertrain technologies aimed at boosting performance and fuel efficiency.

Production of the pulley components in Anna is to begin in 2013.

"The production of this new CVT technology puts the Buckeye State right in the middle of Honda's global strategy," Hide Iwata, CEO of Honda of America Manufacturing, said in a statement.

The investment in the Anna plant is aligned with a $120 million investment announced last year for Honda's plant in Russells Point, Ohio, where the company will begin producing the CVT this summer.

The modernization and expansion of the Russells Point transmission plant and the new pulley component production at Anna will create a combined 150 new jobs, Honda said.

Since November 2010, Honda has announced more than $500 million in investments for advanced technologies and systems at its four Ohio plants. In January, Honda's Acura luxury brand said the all-new Acura NSX -- which debuted last month at the Detroit auto show -- will be developed in Ohio and built at a new manufacturing operation in central Ohio.

PRESS RELEASE: Honda to Invest $98 Million in Anna Engine Plant for Production of Advanced Transmission Components
Honda will build new continuously variable transmission (CVT) in Ohio;
Total recent Honda investment in Ohio operations exceeds $500 million

ANNA, Ohio, Feb. 1, 2012 – Honda announced today that it will invest $98 million at its Anna Engine Plant as part of a strategy to build the company's next-generation powertrain technologies in Ohio. The move is aligned with a $120 million investment, announced last year, for the production of a new continuously variable transmission (CVT) in nearby Russells Point, Ohio.

The Anna Engine Plant will manufacture high-tech pulley components for Honda's new CVT technology, which is part of the new Honda 'Earth Dreams' powertrain technology lineup, to be deployed for the first time in the U.S. in the all-new, more powerful and fuel-efficient 2013 Honda Accord.

Honda will produce its technically advanced CVT on a new assembly line at Honda Transmission Mfg. of America, Inc. in Russells Point. The modernization and expansion of the Russells Point transmission plant, along with the new pulley component production at the Anna plant, will create 150 new jobs.

Since November 2010, Honda has announced new investments exceeding $500 million in its two auto plants and two powertrain plants in Ohio.

"For decades, our two Ohio powertrain plants have worked together to deliver advanced products for our customers," said Hide Iwata, president and CEO, Honda of America Mfg., Inc. "The production of this new CVT technology puts the Buckeye State right in the middle of Honda's global strategy."

The new transmissions will debut in the all-new 2013 Honda Accord models that will come to market later this year. The Accord for the U.S. market is built only in Ohio at the Marysville Auto Plant.

"Applying Honda's new Earth Dreams Technologies in the production of engines and transmissions will greatly enhance the driving performance of Honda vehicles, and help us achieve fuel economy leadership in every segment over the next three years," said Iwata.

While the Anna plant prepares for its production launch, the Russells Point transmission plant will proceed with CVT production this summer. These transmissions require highly sophisticated pulley components. Initially, these components will be supplied from Honda operations in Japan, before CVT production for U.S. models is taken up by the Anna plant in 2013.

"Our associates have incredible experience and we are counting on them to help us introduce an even higher level of powertrain technology for our customers," Anna Engine Plant Manager, John Spoltman, said. "The new CVT technology will be mated with Honda's new Earth Dreams 2.4-liter direct-injection engine, which will also be produced here at the Anna Engine Plant."

Earth Dreams technology defines Honda's next-generation engine and transmission strategy to realize advanced levels of both performance and fuel efficiency. Introduction of the new CVT for mid-size cars, will improve fuel economy by approximately 10 percent compared with the current five-speed automatic transmission.

The new component production operation at Anna will utilize 84,000 square feet of plant space for lathing, heat-treating, grinding and subassembly of precision CVT pulley systems. With the capacity to manufacture 1.18 million V-6 and four-cylinder engines annually, the Anna Engine Plant is the largest automobile engine factory in Honda's global production network
At the Russells Point transmission plant, CVTs will be manufactured on a sophisticated assembly line that is being constructed as part of a $70 million, 200,000-square-foot expansion of the facility. An additional $50 million is being invested in a 75,000-square-foot expansion of the facility for additional aluminum casting operations to support the CVT assembly line.

Honda Transmission Mfg. of America currently employs 1,050 associates. In addition to automatic transmissions, the Russells Point plant also manufactures four-wheel-drive systems. Both plants manufacture the precision steel parts for engines and transmissions, and four-wheel-drive components.

Today's announcement continues a series of major initiatives by Honda in its Ohio operations. In January, the Acura luxury brand revealed that the all-new Acura NSX supercar will be developed in Ohio and built at a new manufacturing operation in central Ohio. And since November 2010, Honda has now announced more than $500 million in investments for advanced technologies and systems at it four existing Ohio plants.

Other major initiatives now under way include construction of on-site parts consolidation centers at Anna and East Liberty, a sophisticated new stamping press at the Marysville Auto Plant, and several major projects at East Liberty to expand assembly lines, implement new paint technologies and consolidate vehicle quality operations.

Source;

http://www.autonews.com/apps/pbcs.dll/article?AID=/20120201/OEM01/120209993/1424

Honda President Ito Forecasts Year of ‘Complete Rebound'

Jan. 27 (Bloomberg) -- Honda Motor Co. President Takanobu Ito forecast that business results at Japan's third-biggest carmaker will climb to the highest in at least five years, led by sales of Accord sedans and Civic compacts in North America.

Business results in the year ending March 2013 will recover to levels achieved before the failure of Lehman Brothers Holdings Inc. roiled global markets, as sales climb above 4 million vehicles for the first time, Ito said in an interview this week. Lehman filed for bankruptcy in September 2008, six months after Honda earned record annual profits.

“It will be the year of the complete rebound,” Ito said at the company's Tokyo headquarters. “Sales in North America will lead the recovery. We'll introduce a fully revamped Accord in the fall, and that will be a big plus to our sales.”

Ito's comments reflect a revival in confidence by Japanese automakers as they recover from a year plagued by natural disasters at home and in Thailand. Toyota Motor Corp., Asia's largest carmaker, said this week annual sales will be 100,000 units higher than it anticipated last month.

“Honda's targets are definitely aggressive, but the U.S. economy seems like it's going to recover to a better-than- expected level this year so it's likely for them to achieve it,” said Mitsushige Akino, who oversees $600 million at Ichiyoshi Investment Management Co. in Tokyo. “They've remodeled their best-selling cars, and we can expect strong sales in North America to help them regain market share.”

Reversal of Fortune
Honda fell 1.9 percent to close at 2,689 yen in Tokyo. It's gained 15 percent this year, the best performer among Japan's three biggest automakers. That's a reversal from 2011, when the stock's 27 percent drop made it the worst performer.

Honda's operating income, or sales minus the cost of goods sold and administrative expenses, will probably double to 586.6 billion yen ($7.6 billion) next fiscal year after shrinking 52 percent, according to the average of 24 analyst estimates compiled by Bloomberg. Earnings reached 953.1 billion yen, 851.9 billion yen and 868.9 billion yen, respectively, in the years before Lehman's bankruptcy.

Ito, 58, is counting on the U.S. market to drive growth.

Redesigned Accord
The redesigned Accord sedan, the Civic and CR-V sport- utility vehicle will help Honda increase U.S. sales 24 percent to 1.43 million units in 2012, Ito said. Sales in the market, Honda's largest, declined 6.8 percent last year, led by a 17 percent drop in deliveries of the Accord. The Accord is Honda's best-selling U.S. model, followed by the Civic.

Ito ruled out any major overhaul of the Civic after the current version of the sedan, which failed to receive the “recommended” status its predecessors had from Consumer Reports magazine, was the best-selling model in the compact-car segment in the last three months of the year.

Honda's new models will give it an edge in the U.S. over South Korea's Hyundai Motor Co., which is producing close to full-capacity, said Kota Yuzawa, a Tokyo-based analyst at Goldman Sachs Group Inc. That puts Honda in “good position” to regain lost market share, he said.

Honda may not be alone. Japan's three biggest carmakers are poised to gain market share this year at the expense of U.S. producers led by General Motors Co. and Ford Motor Co., according to five analysts surveyed by Bloomberg.

‘Unstoppable' Motorization
In China, the world's largest auto market, Honda expects its sales to rise more than 20 percent to 750,000 units in 2012 after they shrank for the first time in 2011 in a slowing market, Ito said. The company plans to introduce three gas- electric hybrid models in the country this year, he said.

“China is still strong,” Ito said. “Once motorization captures a market, it's unstoppable.”

China's total vehicle sales -- including cars, trucks and buses -- grew 2.5 percent to 18.5 million units last year, according to the China Association of Automobile Manufacturers, trailing growth in the U.S. for the first time in at least 14 years. Honda expects the market to expand to 20 million this year, or “just above” China's economic growth, he said.

In Thailand, where the country's worst floods in almost 70 years disrupted assembly plants and supply of components in 2011, Honda plans to resume production starting in April, Ito said. Damages stemming from Thailand forced the company to scrap this fiscal year's profit forecast.

Reorganizing Factories
As part of Honda's strategy of producing cars where they are sold, the company plans to reorganize its Japanese factories so they focus on production of minicars, a growing category that makes up about 40 percent of the nation's auto demand, Ito said. Orders for the N Box minicar in Japan reached 27,000 units in its first month of sales, more than double Honda's original target.

Minicars, defined as vehicles no longer than 3.4 meters (11 feet) in length, will account for 40 percent of Honda's Japan sales, compared with 25 percent now, Ito said.

Honda joins Toyota and Nissan in reorganizing operations as the yen, which has gained against the world's 16 most-traded currencies for two straight years, erodes the value of exports. Honda plans to boost the portion of vehicles sold in the same region they're built to as high as 80 percent, Ito said. In 2010, Honda sold about two out of three Japan-built cars in the country.

Officials at Toyota and Nissan this month have also echoed plans to increase their portion of vehicles sold in the region where they're assembled.

“Minicars will be key for us in Japan in the next five years,” Ito said.

Source;
http://news.businessweek.com/article.asp?documentKey=1376-LYALB80UQVI901-3I262TT8I3HDDBE46BK1GAN789

Honda plans to make lighter vehicles - Nikkei

Dec 24 (Reuters) - Honda Motor Co plans to adopt new design and assembly methods to make its vehicles lighter, the Nikkei business daily reported.

Some of Honda's new manufacturing methods involve welding outer panels to the frame, rather than assembling the ceiling, side and other panels, to reduce the use of bolts and reinforcing materials, the Japanese newspaper said.

Honda plans to spend tens of billions of yen to revamp production lines in Japan and overseas, using the new methods on small vehicles initially, then on all models within several years, the Nikkei said.

The automaker has begun steps to scale back on materials, parts and processing steps for producing its minivehicle, the N Box, which was launched last Friday, the daily said.

Honda modified one of the two production lines that assemble the N Box at its Suzuka plant in Mie Prefecture, the Nikkei said. The move will help make the N Box 10 percent lighter and lower manufacturing costs, the paper added.

By making lighter and cheaper automobiles, the carmaker aims to fast track its advance into emerging markets, which is one of its top priorities, the newspaper said.

Source;
http://www.reuters.com/article/2011/12/23/honda-idUSL3E7NN2XB20111223

Honda CEO Interview

Honda is a blessing

It seems there is no shortage of discouraging economic news, but there are times when the best thing we can do is sit back and count our blessings rather than our problems.

Alabama has certainly benefited from assembly plants of three of the brightest jewels of the automotive industry in recent decades, and the crown jewel of those three lies in Talladega County.

The Economic Development Partnership of Alabama lists 19 manufacturing facilities for automobiles, light trucks and heavy trucks in the southeastern states. Of the three manufacturers within the state — Honda, Mercedes and Hyundai — Honda boasts the largest workforce with 4,000 associates, with Mercedes having 2,800 team members and Hyundai 2,700. Honda’s payroll exceeds $250 million annually.

Honda Manufacturing of Alabama alone contributes $4.5 billion annually to the Alabama economy, representing three percent of the state’s Gross State Product, according to the EDPA study. The EDPA lists Honda’s capital investment in Alabama at $1.4 billion.

In addition, 38 Tier 1 suppliers have located operations in Alabama, bringing an additional 4,000 jobs to the state.

Honda is hosting a celebration Monday, marking the 10th anniversary of the day the first vehicle rolled off of the production line at the plan in Lincoln.

Gov. Robert Bentley plans to be there to help celebrate the milestone with HMA president Tom Shoupe, Congressman Mike Rogers, community leaders and other Honda executives.

The event is the next milestone in the history of Honda in Alabama.

That began in 1999 when Honda selected Lincoln as the site of its next vehicle and engine plant, with an initial projection of employing 1,500 associates.

That was followed by a groundbreaking ceremony for the plant April 25, 2000, and the hiring of the first HMA employees that same year.

The first “customer-ready” Odyssey minivan rolled off the line November 14, 2001, six months ahead of schedule.

Since that time Honda added production of the Pilot sport utility vehicle at the plant, the innovative Ridgeline pickup and the Accord V-6 sedan.In September of last year, Honda announced it’s Alabama plant had built its two millionth vehicle and V-6 engine. Honda has announced hundreds of millions of dollars in expansions to the plant at Lincoln, and earlier this year announced plans to built the Acura MDX luxury sport utility vehicle in Alabama beginning in 2013.

Just this month, the company announced there would be no layoffs in spite of a production slowdown caused by flooding that stopped production of parts in Thailand, just as it did earlier this year when a tsunami interrupted the supply line in Japan.

Honda’s achievements are certainly worthy of celebrating as blessings for our state—blessings worth counting.

Source;
http://www.dailyhome.com/view/full_story/16417252/article-Honda-is-a-blessing?instance=home_opinion

Update #2: Impact of Thailand Flooding on Honda’s Automobile Operations in North America.

11/14/2011

CR-V to Begin Mass Production in Ohio

The all-new 2012 Honda CR-V will begin mass production in the U.S. on Tuesday, Nov. 29 at the East Liberty Auto Plant in Ohio. As announced last week, CR-V will go on sale as scheduled in mid-December, despite ongoing production adjustments at Honda’s U.S. and Canadian plants brought about by the persistent flooding in Thailand.

Production Adjustments Continue

Due to continued flooding in Thailand, a number of Honda suppliers have been unable to maintain the supply of parts to Honda. As a result, Honda will continue managing the parts supply in North America by taking the following actions:

• Honda will continue temporary production adjustments at all six Honda auto plants in the U.S. and Canada.
• Auto production rates will vary from plant to plant, but some plants will produce at rates above the previously announced 50 percent of the original plan through Nov. 30.
• All plants in the U.S. and Canada are expected to produce at normal levels on Dec. 1 and 2. Production plans after Dec. 2 will be announced in the future.

In 2010, 87 percent of the Honda and Acura automobiles sold in the U.S. were produced in North America. While most of parts and materials used to produce these products are purchased from North American suppliers, a few critical electronic parts are sourced from Thailand and other regions of the world. Honda is working closely with its suppliers in Thailand and throughout its global network to reestablish the flow of parts for the products made in North America.

Honda remains focused on minimizing the impact to its associates and their families and plans no layoffs at any of its North American facilities. Non-production days will continue to be treated as "no pay, no penalty," meaning Honda associates can report to work, use a vacation day, or take the day off without compensation or penalty.

Honda deeply regrets any inconvenience this may cause to its customers.

Source;
Honda North America

Honda: Dealer Inventory of 2012 Honda Civic Is Virtually Zero

Just the Facts:
-Sales of the 2012 Honda Civic appear to be stalled, with the Japanese automaker reporting that October sales of the Civic were down 2 percent.
-Honda says it's because dealer inventory is "virtually zero" due to natural disasters in Asia, including the Japan earthquake and tsunami in March and recent flooding in Thailand.
-"Dealers can't sell cars that they don't have on their lots," a Honda spokeswoman told Inside Line on Thursday.

TORRANCE, California — Sales of the 2012 Honda Civic appear to be stalled, with the Japanese automaker reporting this week that October sales of the Civic were down 2 percent.

Honda tells Inside Line that it's not because the redesigned small car, which debuted with much hoopla at the 2011 New York Auto Show, is not resonating with buyers or needs better direction with advertising or social media efforts. The Japanese automaker says it's because dealer inventory is "virtually zero" due to natural disasters in Asia, including the Japan earthquake and tsunami in March and recent flooding in Thailand.

"Dealers can't sell cars that they don't have on their lots," said Gina Jorge, assistant manager for American Honda Motor Co. public relations in response to an e-mailed query from Inside Line on Thursday. "In fact, most dealers are selling Civics nearly as fast as they receive them."

On November 1 Honda said Civic posted October sales of 16,173, down 1.9 percent from the previous October. It sold 480 units of the 2012 Honda Civic Hybrid, a decline of 24.7 percent from the previous October.

Honda reported year-to-date Civic sales of 183,557 versus 215,393 in the same period in 2010. But it is unclear how many of the 183,557 were 2012 Civics. The various models of the 2012 Civic have been gradually rolled out this year. The sedan, coupe and hybrid versions debuted on April 20; the Civic HF debuted on May 10; the Civic Si coupe and sedan debuted on May 24 and the Civic Natural Gas model debuted on October 18.

Honda said it does not break out sales by model year and does not break out sales by various models with the exception of the Civic Hybrid. It has projected sales of approximately 2,000 Civic Natural Gas models per year in the near term, double the amount sold in recent years.

"Civic sales are down for one simple reason," wrote Chuck Schifsky, an American Honda Motor Co. spokesman in response to the e-mailed query from Inside Line. "Low dealer inventory as a result of a shortage of small parts caused by the Great East Japan Earthquake earlier this year which nearly halted production of the 2012 Civic."

Schifsky noted that flooding in Thailand "will cause another disruption in production."

"It's still too early to say how deeply this will impact production of the '12 Civic," he added. "But because dealer inventory of Civics is virtually zero and dealers are selling the few Civics they are getting almost as soon as the cars arrive, any disruption in Civic production will not help the situation."

He added: "We need to build more Civics and get them to our dealers. This is a supply problem, not a demand problem. There just aren't any Civics on dealer lots."

When the Japan earthquake hit, production of the Civic was just ramping up. Approximately 90 percent of the vehicles Honda sells in North America are built in North America, according to the automaker. The bulk of Civic models, including the sedan, are built in Greensburg, Indiana. Honda began a second production shift last week there, which boosts production to its full 200,000-unit annual capacity.

"While the majority of the parts are sourced in North America, there are a small number of parts that are sourced from Japan," Schifsky wrote. "This is what caused the vehicle shortage."

Honda announced earlier this week that flooding in Thailand will cause another disruption in production, likely delaying the debut of the 2012 Honda CR-V.

"It's still too early to say how deeply this will impact production of the '12 Civic," Schifsky said.
Inside Line says: Earthquakes and floods mean the 2012 Honda Civic is off to a rocky start in the marketplace.

Source;
http://www.insideline.com/honda/civic/2012/honda-dealer-inventory-of-2012-honda-civic-is-virtually-zero.html

Honda cranks up output as auto sector sees comeback

The engine of the Ontario economy is starting to hum again, propelled mainly by a return to full production at Japanese auto makers’ plants.

Honda of Canada Manufacturing (HMC-N30.00-0.67-2.18%) in Alliston, Ont., said Wednesday that it will begin cranking out 1,600 vehicles a day in November, more than two years after it cut production during the recession and about eight months after it slashed output because of disruptions caused by the March 11 earthquake in Japan.

The two Honda plants in Alliston, located about 90 kilometres north of Toronto, will also operate on two Saturdays a month – likely until at least the end of the year – mainly to build more models of the compact Civic. The top-selling passenger car was redesigned for the 2012 model year, and production and sales were just starting to gear up when the earthquake created chaos in the supply chain and made it difficult for auto makers to get enough parts.

Honda’s move means that two-thirds of Canada’s car and light truck assembly plants will be running on overtime. That’s a major boost for a Canadian economy still in the midst of an anemic recovery from the recession and one in which gross domestic product fell by 0.4 per cent in the second quarter.

“The key point is that auto production did slow significantly in the summer and it did affect the overall economy, but now it is back in full swing,” said Carlos Gomes, a Bank of Nova Scotia economist who follows the auto industry closely.

There were signs in September that the worst had passed, noted industry analyst Dennis DesRosiers, president of DesRosiers Automotive Consultants Inc., of Richmond Hill, Ont.

Car production at Toyota Motor Manufacturing Canada Inc. (TM-N66.91-0.43-0.64%) in Cambridge, Ont., rose 19 per cent that month from year-earlier levels, Mr. DesRosiers said, compared with a 6.2-per-cent decline in the first nine months of the year.

Since then, Toyota’s other plant in Woodstock, Ont., has returned to a full, two-shift operation and is also working overtime to boost output of the RAV4 crossover.

Nonetheless, when compared with vehicle production in the United States and Mexico, “we’ve been the laggard all year and remained so in September,” Mr. DesRosiers said.

While the assembly industry is located entirely in Ontario and most of the supply base is in that province as well, the production rebound will also contribute to national economic growth, Mr. Gomes said.

The rebound will add almost a full percentage point to the annual growth rate in the fourth quarter, he said. His forecast is that the economy will grow by 1.2 per cent this quarter.

Japan-based auto makers want to increase their inventories, which stood at just 40 days of supply in the U.S. market in September, compared with the usual figure of about 60 days. In addition, U.S. sales jumped by a surprising 10 per cent in September. That means all auto makers want to make sure they have enough vehicles on U.S. dealers’ lots in the fourth quarter.

The U.S. market is the destination for 80 per cent of the Civics, Acura MDX and ZDX models that roll off the Alliston assembly lines.

The shortage of Civics since March means there are several thousand back orders for the car at Canadian dealerships, Jerry Chenkin, executive vice-president of Honda Canada Inc. told reporters at the Alliston plant on Wednesday. Some customers have been waiting as long as 45 days, he said, but the increase in production should cut that to 30 days.

The Civic has been the best-selling passenger car in Canada for the past 13 years and led the second-place Hyundai Elantra by 1,122 vehicles at the end of September, despite a 12-per-cent sales decline in the first nine months of 2011.

Source;
http://www.theglobeandmail.com/globe-investor/honda-cranks-up-output-as-auto-sector-sees-comeback/article2206417/

Honda to cut exports from Japan

Honda plans to reduce exports from Japan to as little as 10% of domestic production as the strong yen erodes earnings from overseas shipments.

Honda aims to sell 80% to 90% of Japan-made vehicles in its home market, spokeswoman Tomoko Uchida said. Last year, the carmaker shipped 310,254 vehicles, or 34% of its Japanese production, overseas.

Japanese carmakers including Honda, Toyota and Nissan are moving more production out of Japan to counter the effect of the strong yen. Honda plans to maintain domestic production of about 1 million vehicles a year, Uchida said, reiterating a previous statement by the company.

Source;
http://www.freep.com/article/20111006/BUSINESS01/110060539/Honda-cut-exports-from-Japan

Honda eyeing first Russian car plant - Nikkei

TOKYO Sat Sep 17, 2011 11:20pm EDT

(Reuters) - Honda Motor (7267.T) plans to set up its first assembly plant in Russia, the Nikkei business daily reported on Sunday, as Japan's No.3 automaker looks to lift its competitiveness in the fast-growing auto market.

The company is looking to invest several billion yen (tens of millions of dollars) to produce 30,000 to 50,000 cars annually, the Nikkei said, adding Honda has submitted the plans to the Russian government and had started talks with officials.

Honda is consulting officials on the location of the assembly plant, which will use components imported from its global facilities, and the Russian Far East is seen as one candidate, the Nikkei said.

A Honda spokesman declined to comment on the report.

General Motors (GM.N), Renault (RENA.PA), and a host of other top players have already announced plans to ramp up production in Russia in exchange for lower import tariffs for parts.
Honda, which sold about 18,000 cars in Russia last year, has been selling its cars with tariffs of about 50 percent, making them more expensive than automobiles produced by rivals locally.
Russia's vehicles market is expected to double sales to about 4 million units a year by mid-decade.

(Reporting by James Topham)

Source;
http://www.reuters.com/article/2011/09/15/us-usa-campaign-palin-idUSTRE78E77B20110915