Honda Statement on the first anniversary of the Great East Japan Earthquake

Thank you for your continuous understanding and support for Honda's activities.

One year has passed since the Great East Japan Earthquake that occurred on March 11, 2011. Honda would like to express its deepest sympathy and condolences to the victims of the disaster and our sincere hopes for the earliest possible reconstruction of the affected areas.

Despite the fact that we caused our customers some inconvenience during the past year due to the impact of the earthquake, such as delays in the delivery of some new products, we received a great outpouring of support and heartwarming messages from our friends and customers inside and outside of Japan. For this we are extremely grateful.

Honda would like to contribute to the earliest possible reconstruction of the affected areas by continuing our support activities and by dedicating ourselves to continue delivering products and services that please our customers.

In Europe, Honda have set challenging plans to achieve complete recovery as shown by the 2011 launch of the new Civic and seven all new motorcycle models. Furthermore, we are recruiting 500 new employees at our European manufacturing facility to support the Autumn launch of our all new European CR-V.

We appreciate your continuous support for our activities.

11 March, 2012
Ken Keir,
Executive Vice President, Honda Motor Europe

Source;
http://www.hondanews.eu/en/news/index.pmode/modul,detail,0,2204-DEFAULT,21,text,1/index.pmode

Dramatic unseen footage of Japanese tsunami

Wow....

source;
www.autoblog.com

Honda Prays for Disaster-Free U.S. Rebound Led by New Models

By Alan Ohnsman
Dec. 5 (Bloomberg) -- Honda Motor Co. says replenished vehicle inventory and new Honda and Acura models planned for the next 24 months will spur a U.S. sales rebound next year after natural disasters dashed its 2011 goals.

Honda’s loss of some North American output in October and November due to parts shortages caused by floods in Thailand led to it being the only large automaker to post a U.S. sales decline last month as total sales jumped 14 percent. That came after six months of declines resulting from reduced auto inventory triggered by Japan’s March earthquake and tsunami.

“I’m going to the shrine to pray to avoid any more such disasters from Mother Nature,” Tetsuo Iwamura, Honda’s top North American executive, said in an interview on Dec. 2 in Las Vegas. “Next year, even starting this month, we’ll recover.”

Japan’s third-largest automaker counts on the U.S. for the largest portion of its global sales. Tight inventory and competition from Ford Motor Co., Hyundai Motor Co. and Kia Motors Corp. and others cut Tokyo-based Honda’s U.S. sales 5.3 percent through November.

While Honda’s market share has fallen to 9 percent from 10.5 percent so far in 2011, combined share for South Korean affiliates Hyundai and Kia rose to 9 percent from 7.8 percent a year ago.

“It is a year to forget, and then push the reset button,” said Rebecca Lindland, an analyst with researcher IHS Automotive. “We’re now seeing heavy replacement demand, so there is a lot of sales opportunity out there.”

IHS Automotive estimates U.S. sales of new cars and trucks will rise to about 13.7 million units in 2012, from about 12.7 million this year, she said.

‘Outrageous’ Competition

“The competition is outrageous and it’s coming from every part of the market,” Lindland said. “Every year we say this is an incredibly competitive market, but this year we mean it.”

Honda’s immediate goal is to boost production of its new Civic compact and CR-V compact sport-utility vehicle that goes on sale this month, Iwamura said. The company starts December with about a 40-day supply of vehicles, he said.

“Unfortunately, our competitors didn’t show us any mercy,” Iwamura said. “They took as much market share from us as they could. That’s the reality of the market. You have to fight back.”

In 2012, the company releases a revamped Accord, Honda’s top-selling U.S. nameplate, and other models Iwamura declined to identify. “Fortunately, we are going to have lots more models in the next 24 months,” he said.

New Engines, Hybrids

Vehicles coming out next year will also begin powered by new four- and six-cylinder engines and transmissions Honda unveiled last week at the Tokyo Motor Show, claiming they will lead the industry in fuel efficiency.

The company also will add new hybrid models from next year that will boost its reputation for fuel-efficiency and advanced technology, he said.

“New models with good technology, yet very value-oriented pricing for the sake of competitiveness,” said Iwamura, 60. “That is our key for a successful year in 2012 and onwards.”

Sales of the new Civic, released this year, will continue to increase and haven’t really been hurt by some critical reviews, he said.

“In November, Civic was the number one selling compact vehicle,” Iwamura said. “Customers still believe in the Civic.”

The 2012 Civic failed to receive the “recommended” status from Consumer Reports magazine. The revamped model “ranks near the bottom of its category,” David Champion, senior director of the magazine’s auto test center, said in an Aug. 1 e-mailed statement.

Honda’s U.S. headquarters are based in Torrance, California. The company’s American depositary receipts rose 0.3 percent to $31.59 at 9:35 a.m. New York time.

Source;
http://www.businessweek.com/news/2011-12-05/honda-prays-for-disaster-free-u-s-rebound-led-by-new-models.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/

Japan's plants hum, but hurdles remain

By Hans Greimel
TOKYO -- Playing a frantic game of catch-up, Japan's automakers are running assembly plants at a pace faster than pre-earthquake schedules in order to boost inventories and recoup sales.

Toyota and Nissan are leading the surge, with output in Japan not only back to normal but exceeding year-ago levels. Mazda and Suzuki have reported their first year-over-year production increases since the March 11 quake, and Honda, Subaru and Mitsubishi are close behind.

But even as the companies return to full domestic output, big hurdles remain.

Some model variants are still in limited production because of lingering shortages of parts, especially microcontrollers. And even with output restored, it could take months for carmakers to rebuild prequake inventory levels, especially at U.S. dealerships.

Suppliers may struggle to keep pace with the surge. And automakers are rejiggering supply chains so they won't get burned again.

They are racing to find multiple sources for parts; tighten control over lower-tier suppliers; buy more parts overseas; and even bolster stockpiles, an abrupt change from Japan's treasured just-in-time approach.

Building inventories
Toyota is among the most aggressive in its supplier overhaul.

"We have instructed them to have a plan that allows them to go back to normal operations within two weeks of a major disaster," Shinichi Sasaki, Toyota Motor Corp.'s executive vice president for global purchasing, told Automotive News.

Toyota's domestic output rose 12 percent in August -- its first year-over-year increase since the earthquake. But it does not expect normal U.S. inventories until March.

Nissan's domestic production actually edged ahead of last year's in May. But not even Nissan says it can make all the car variants it wants. Because of pinched pipelines for some microcontrollers, the small computer chips that control everything from engines to entertainment systems, Nissan does not expect to return to unrestricted production until later this month.

Subaru says its Japan plant will be back to normal by the end of October. But it will take until March for the brand to achieve prequake U.S. inventory levels, especially for Japan-made models such as the Forester SUV and Impreza sedan.

Chips still down
Output of most models at Honda is almost back to normal. But it is still facing shortages of the redesigned Civic in the United States and the Brio small car for Asia. Because those cars were introduced after the quake, Honda couldn't stockpile enough microchips. Civic production should return to normal by the end of this month, and U.S. inventories of the model are expected to be restored by late November.

Nissan spokesman Toshitake Inoshita said: "In terms of raw production numbers, we have more than full production. But we are still waiting on some electronic chips."

Chip maker Renesas Electronics Corp. of Tokyo remains a bottleneck, but that will ease soon. The supplier, which controls about 41 percent of the global market for automotive microcontrollers, returned to prequake output at the end of September, spokeswoman Kyoko Okamoto said. That means a normal flow of chips will start to reach automakers this month.

But Renesas is far from recovered. It recouped prequake output by shifting work from its damaged Naka factory in Japan's quake zone to chip foundries in Singapore and Taiwan. The Naka factory is still limping along at just over half its prequake capacity. Until the factory is fully restored, it may be hard for Renesas to meet increased demand as automakers ramp up.
Masaya Yamashita, Honda Motor Co.'s global purchasing boss, says: "In order to supply to the carmakers, I think Tier 1 suppliers are really struggling to make deliveries to all of us. The parts are reaching us. But the inventory of parts in the chain is pretty tight."

The pinch has Toyota revising its famous low-inventory, just-in-time production system.

Normally, Toyota carries a two-month inventory of Renesas chips, global procurement chief Sasaki says. But it will raise that figure to as high as four months.

"Right now we are recalculating the optimal volume of inventory that is necessary based on our estimate of how long it will take production at our suppliers to resume after a disaster," he said.

Another new norm: paternalistic big-footing of lower-tier suppliers, a practice previously all but unknown.

Take Nippon Chemi-Con Corp., a maker of aluminum foil for electrolytic capacitors for the electrical system. Its factory was wiped out.

Toyota, which is accustomed to working intimately with Tier 1 and 2 suppliers, decided to get active with lower-tier suppliers that had been flying far below the radar. But when Toyota stepped in to help Nippon Chemi-Con, the industry supplier rebuffed Toyota as an interloper, according to an internal Toyota report reviewed by Automotive News.

Only after weeks of arm-twisting by did the supplier acquiesce to Toyota's help in pumping out 700 tons of liquid waste that had flooded the factory.

Paint battle
Toyota also butted heads with pigment maker Merck, which makes a pearl luster pigment called Xirallic. Merck's kilns in Onahama, Japan, were damaged and unable to supply the pigment, which is a component in many paint colors and is used in about 20 percent of Toyota's vehicles.

Merck rejected Toyota's offers of assistance, according to the Toyota report. So Toyota tried making its own pigments -- with mixed results. Of 67 missing colors, Toyota could successfully substitute only 37.

That was enough to tide Toyota over while Merck recovered. But Sasaki said Toyota asked Merck to establish a backup production site in Germany, the supplier's home country. Merck agreed.

Expect all automakers to keep lower-tier suppliers on a tight leash. Toyota, Nissan and Honda are demanding more control over where suppliers get their components.

"The parts and materials that remained the biggest issues for the longest time after the earthquake aren't the parts that we buy, but the parts or materials that the Tier 1 or Tier 2 suppliers buy," says Honda's Yamashita. When possible, he says, "we want to have dual sources."

Bouncing back
Change in monthly production in Japan, vs. 2010

April June Aug.

Toyota
–75% –13% 12%
Nissan
–49% 2% –3%
Honda
–81% –51% –17%

Source (via Carscoop);
http://www.autonews.com/apps/pbcs.dll/article?AID=/20111010/OEM01/310109970/1117

Toyota-Honda U.S. Rebound Brings Call of ‘What Recession?': Cars

Sept. 30 (Bloomberg) -- Toyota Motor Corp. and Honda Motor Co.'s return to full production this month is boosting U.S. auto sales back near the pace reached before Japan's earthquake.

September light-vehicle sales, to be released Oct. 3, probably rose to a 12.8 million seasonally adjusted annual rate, the average estimate of 14 analysts surveyed by Bloomberg. That would be the fastest pace since April, when lost output caused by Japan's tsunami crimped supply of parts and finished cars.

“Recovering inventory levels have helped to bring buyers back into the market,” said Jeff Schuster, executive director of global forecasting at J.D. Power & Associates.

Jesse Toprak, who develops forecasts at TrueCar.com, went so far as to title his latest report “What Recession?” as the auto rebound defies consumer confidence that is near a two-year low.

Toyota has said it expects to reverse monthly U.S. sales declines beginning next month, and Honda is adding overtime shifts at two Ohio plants. Better supply also probably meant incentives rose from the lowest in almost six years.

“The big story this month was better inventory and favorable pricing” for consumers, said Jessica Caldwell, an analyst at Santa Monica, California-based Edmunds.com.

Sales declines at Toyota and Honda contributed to the U.S. auto sales pace slowing from a 13.1 million rate averaged in the year's first four months to as low as 11.6 million in June, according to researcher Autodata Corp.

Toyota Still Recovering
Toyota slipped behind Ford Motor Co. to third in U.S. sales this year through August, which was the first month in the past year that its global production increased. The Toyota City, Japan-based automaker is still recovering and may say sales dropped 15 percent, the average estimate of five analysts surveyed by Bloomberg, leaving it in third again.

“With the launch of the new Camry, October should be even better,” said Paul Atkinson, who operates Toyota dealerships in Bryan and Madisonville, Texas. “We're selling as fast as they're coming off the damn truck.”

Toyota, ramping up production of the redesigned Camry sedan, may say sales dropped 15 percent, the average estimate of five analysts surveyed by Bloomberg. The Toyota City, Japan- based automaker's global production increased for the first time in 12 months in August.

Toyota shares fell 0.5 percent to 2,688 yen in Tokyo at the 3 p.m. close of Tokyo trading. Nissan Motor Co. gained 0.4 percent, while Honda fell 1.4 percent.

Overtime at Honda
Sales may decline 6.1 percent at Honda, the average of five analysts' estimates, after deliveries slid 20 percent or more in each of the past four months. The Tokyo-based automaker is scheduling overtime shifts at its Marysville and East Liberty assembly plants in Ohio, Ron Lietzke, a spokesman, said in a Sept. 28 phone interview.

Honda began the month with 32 days supply of vehicles, from 28 in August, Westlake Village, California-based J.D. Power said in a Sept. 22 statement. The industry standard is about 60 days.

General Motors Co. and Ford are anticipating that demand will keep increasing as the largest U.S. automakers negotiate labor contracts that boost production and add jobs.

GM, which reached a new four-year contract with the United Auto Workers this month, may report a 19 percent increase in September sales, the average of eight analysts' estimates. The Detroit-based automaker and union said the accord adds or retains 6,400 jobs and reopens an assembly plant in Tennessee.

Ford, Chrysler
Ford has discussed with the UAW adding as many as 10,000 union jobs in the U.S., according to three people familiar with the talks. Some of those workers would assemble Fusion sedans, which are currently made in Mexico, said one of the people who asked not to be identified because the negotiations are private.

Deliveries this month may rise 5.9 percent for Dearborn, Michigan-based Ford, the average of eight analysts' estimates.

Sales at Fiat SpA-controlled Chrysler Group LLC, which has extended its UAW contract to Oct. 19, may climb 20 percent, the average of seven analysts' estimates.

GM fell 58 cents, or 2.8 percent, to $20.18 at 4 p.m. in New York Stock Exchange composite trading. Ford dropped 33 cents, or 3.3 percent, to $9.67.

Confidence among U.S. consumers stagnated in September near a two-year low as the share of households saying it was difficult to find a job climbed to the highest level in almost three decades. The Conference Board's sentiment index increased by 0.2 to 45.4 from an August reading that was the lowest since April 2009, the New York-based researcher said Sept. 27.

Auto Industry Shrinks
“The economy is stopped dead in its tracks,” George Magliano, a New York-based economist at IHS Automotive, said in a phone interview. “Considering that, the auto business is showing pretty good strength. The industry is hiring, it's producing more and there's pent-up demand.”
GM and Ford will be adding back only a portion of the jobs they shed during the recession that sent auto sales to a 27-year low of 10.4 million in 2009, according to Autodata Corp.

GM had about 49,000 U.S. hourly employees at the end of 2010, a year after its U.S.-backed bankruptcy. That's down from 111,000 such workers at the end of 2005, the company said in a Sept. 28 conference call with analysts.

Last year, about 962,000 U.S. workers were employed making vehicles and parts, according to the Bureau of Labor Statistics in Washington. That's down 32 percent from 1.41 million in 2005.

The downsizing of the industry, achieved in part by U.S.- backed bankruptcies for GM and Chrysler, meant cutting production capacity. That prevented U.S. automakers from raising output and offsetting industrywide constraints on inventory after the Japan earthquake and tsunami in March, said Alan Baum, an industry consultant at Baum & Associates.

‘Limited Ability'
GM, Ford and Chrysler “had a fairly limited ability to capitalize because there are a lot fewer auto plants and workers than there were four years ago,” said Baum, who is based in West Bloomfield, Michigan. “You can't just add a shift willy- nilly.”

Nissan, whose better supply of parts has buoyed inventory levels above its Japan-based rivals, may say deliveries climbed 18 percent, the average of five analysts' estimates.

Hyundai Motor Co., South Korea's largest automaker, and its affiliate Kia Motors Corp., may combine to sell 20 percent more vehicles than a year earlier, according to the average of three estimates. Both automakers are based in Seoul.

J.D. Power today increased its estimate for the September auto-sales rate to 13 million from 12.9 million.

Industrywide deliveries may rise to 12.7 million cars and light trucks this year, the average of 18 analysts' estimates surveyed by Bloomberg in August. Sales may climb to 13.6 million in 2012, the average of 15 estimates. The U.S. averaged annual sales of 16.8 million vehicles from 2000 to 2007, according to Woodcliff Lake, New Jersey-based Autodata.

The following table shows estimates for car and light-truck sales in the U.S. Estimates for companies are a percentage change from September 2010. Forecasts for the seasonally adjusted annual rate, or SAAR, are in millions of light vehicles.

September had 25 selling days, matching the year-earlier period.*T

GM Ford Chrysler SAAR
Himanshu Patel NA NA NA 12.8
(JPMorgan)
Rod Lache 21% 8.5% 22% 13.0
(Deutsche Bank)
Chris Ceraso 14% 4% 16% 12.6
(Credit Suisse)
Brian Johnson 17% 7% 25% 12.8
(Barclays)
Peter Nesvold 24% 1.6% NA 12.7
(Jefferies)
Patrick Archambault 15% -1.3% 13% 12.4
(Goldman Sachs)
Itay Michaeli NA NA NA 12.9
(Citigroup)
Adam Jonas NA NA NA 12.8
(Morgan Stanley)
George Magliano NA NA NA 12.4
(IHS Automotive)
Jeff Schuster NA NA NA 13.0
(J.D. Power)
Jessica Caldwell 19% 11% 23% 12.9
(Edmunds.com)
Jesse Toprak 21% 8.5% 20% 13.1
(TrueCar.com)
Alan Baum NA NA NA 12.8
(Baum & Associates)
Seth Weber 21% 8% 24% 12.8
(RBC)
Average 19% 5.9% 20% 12.8
*T
--Editors: Bill Koenig, Jamie Butters

Source;
http://news.businessweek.com/article.asp?documentKey=1376-LS9L3G1A1I4H01-31KL3EA80KPOTH5QSRJ96RFGAM

Honda denies nuclear mission for robot

There was a report that Honda was going to outfit ASIMO with a few upgrades to help out in the disaster in Japan;

http://gizmodo.com/5830373/hondas-most-adorable-robot-is-about-to-go-nuclear

TOKYO — Japan's Honda has denied a press report it is hoping to retool its humanoid robot ASIMO to enable it to join emergency work inside the crippled Fukushima Daiichi nuclear power plant.



The Japanese newspaper Asahi Shimbun said in its Friday evening edition that Honda was aiming to upgrade the robot's upper body functions so that it can move its arms as smoothly as a human being.



US Honda spokeswoman Lauren Ebner said the report was "speculation."



"Although Honda hopes that ASIMO will someday be a helper to people, at this point the robot is solely a research and design project," Ebner said in a statement to AFP.



No official at Honda's head office in Tokyo was available for comment on Friday.



The current ASIMO, introduced in 2000 and resembling a small astronaut, stands 130 centimetres (4 feet 3 inches) tall. The bipedal bot can walk, run, carry trays, push carts and shake hands with people.



Asahi said that to work in the debris-strewn nuclear plant, ASIMO would likely be modified and fitted with tyres or caterpillar tracks.



The Fukushima plant has been leaking radiation from its reactors since its cooling systems were knocked out by the March 11 earthquake and tsunami. At some hotspots radiation is high enough to be lethal to humans.



Robots have already been used inside the plant to take video footage, including the US-made PackBot and Japanese-made Quince crawler robots.



Source;

http://www.google.com/hostednews/afp/article/ALeqM5g7m9qLNugC96cUAu4BGNJPVA8Dxg?docId=CNG.1cc437d7d61fc59f3394a87a1a28abbb.171

Honda and Toyota: Getting Back on Track

This year hasn’t been the kindest to Japanese automakers Honda and Toyota. The devastation wrought by March’s earthquake and Tsunami in Japan, resulted in severe disruptions to their supply chains, causing dealer inventories to run low and other automakers to gain ground in sales.



However, after a dismal July, there are signs that both Honda and Toyota are gaining momentum; supply from Japan has improved, while factories in North America are running in overdrive in an effort to boost vehicle inventory to more ‘normal’ levels.



Even though rivals, including Detroit’s big three, have gained ground this year as a result of problems facing the Japanese duo, most seem to view Honda and Toyota’s improving fortunes quite favorably.



Don Johnson, General Motors’ US sales head, believes that more Hondas and Toyotas on dealer lots will help stimulate overall growth in new car sales, bringing back buyers who’ve been sitting on the fence. ”A lot of brand-loyal customers have chosen to sit on the sidelines until selection and price improve,” he says. “They will be coming back into the market.”



That said, it is likely to be some time before inventory levels reach pre-March totals. Randy Pflughaupt, group vice president of sales administration for Toyota, believes it will be 2012 before the automaker achieves year-over-year sales increases; Honda meanwhile, is currently running at around 95 percent of normal production in Japan, with full inventory achieved on all US product lines bar the Civic which traditionally is one of it’s most popular models.



According to a number industry analysts, it’s inventory that defines the ‘winners’ and ‘losers’ in the marketplace and right now, as it stands, Domestic brands are leading the way, Chrysler boasting a 72 day supply on its vehicles, allowing it to post a 20 percent gain in sales during July, as Honda and Toyota combined, slipped 6.9 percent. Ford, with a 54 day supply has seen sales jump by 13 percent for the bread and butter brand and 40 percent for Lincoln in the same period. GM, with a 73 day supply has reported gains of some 8 percent.



“Whoever has the cars, outsells everybody,” declared Ralph Martinez, a Chrysler dealer principal from Wilsonville, Oregon. “People are out there buying,” he said, but “they’re going to places that have a good selection.”



Source;

http://www.autoguide.com/auto-news/2011/08/honda-and-toyota-getting-back-on-track.html

Honda says studying shift overseas to avoid yen effect

* Working under assumption of 80 yen to dollar over next 3 years

* Exports from Japan unsustainable at current dollar-yen rate -CFO

* Discussion of shifting output to continue until last minute -CFO

* Not optimistic that yen will weaken -CFO

* Honda move could put pressure on Toyota, Nissan (Adds details)

By Chang-Ran Kim, Asia autos correspondent



TOKYO, Aug 9 (Reuters) - Honda Motor Co is studying possible production bases overseas to replace export-bound car production in Japan that has been battered by a strong yen, a top executive said on Tuesday.

Japanese auto executives have repeatedly warned that the yen had strengthened beyond what domestic exporters could cope with, but Honda Chief Financial Officer Fumihiko Ike's comment was the first indication so far that any concrete steps are being considered to reduce output in Japan.

"We currently have a three-year plan under which we are assuming a rate of 80 yen to the dollar," Ike told a small group of reporters at Honda's headquarters in Tokyo.

"And under that assumption, the discussion to look for an alternative production base is inevitable."

Ike tempered his comments by stressing that jobs in Japan needed to be protected, and that the discussion would continue right up to the point when the board makes a formal decision, taking into account exchange rates at that time.

But he said he was not necessarily optimistic that the yen would weaken, and that Honda was bracing itself for further appreciation towards 70 yen to the dollar after Japan's solo intervention last week did little to stem the dollar's fall. The U.S. currency was fetching around 77.00 yen on Tuesday.

"Protecting Japanese manufacturing and building cars here is becoming more and more difficult," Ike said. "We can keep the technology here, but if we were to build cars in Japan, they may be good (quality) products but they would be too expensive. And an expensive product is not necessarily a good product."

EXPORT EXPOSURE

Among Japan's top automakers, third-ranked Honda is the least exposed to excessive domestic production, exporting just 30 percent of its Japan-made cars last year. Toyota Motor Corp exported 53 percent, while Nissan Motor Co shipped 59 percent.

All three automakers have a basic strategy of creating a natural hedge against currency swings by producing as many cars as they can where they are sold. But for smaller markets where demand is insufficient to build a factory, production has been concentrated in Japan.

"At these exchange rates we lose competitiveness on these exports, and that leads to a fall in sales, triggering a vicious cycle," Ike said. "And when that happens, the natural consequence is for that production (in Japan) to disappear."

Ike said Honda had already gone down that path with motorcycles, expanding production in India, Vietnam and Indonesia. Honda imports many motorcycles into Japan from Thailand and China.

If Honda takes a similar step with cars, it could put pressure on rivals Toyota and Nissan to do the same and lead to a hollowing out of Japanese manufacturing, one of the main drivers of the country's economy.

Toyota and Nissan have been more vocal than Honda about protecting domestic production, with Toyota pledging 3 million vehicles a year of output in Japan and Nissan pledging 1 million.

Nissan said this week it plans to boost its sales in the shrinking Japanese market to keep the 1 million annual production target as it shifts more export-bound output overseas.

"Car makers are trying hard to cut costs to absorb the currency impact, but there's a limit to the speed and scope of what they can achieve," said Credit Suisse auto analyst Issei Takahashi.

"Even if they build a lot in Japan, if they lose money by doing so they won't be able to protect jobs. I think it's inevitable that some production shifts overseas." (Editing by Edmund Klamann)

Source;

http://www.reuters.com/article/2011/08/09/honda-idUSL3E7J922O20110809

Honda gives back

by David Taylor of www.simcoe.com



ALLISTON - When the sirens started their relentless wail on March 11, 2011 along the eastern seaboard of Japan, who could have imagined that a warning signal might also be resonating in a community in Central Ontario 10,000 kilometres away?



Ever since a massive earthquake rocked Japan almost five months ago, the automobile industry has been adjusting production levels. And its effects have been felt here.



While the world watched as Japan suffered and fought to rebuild, the question became: How would it affect the Simcoe region and the close-knit community of Alliston where Honda operates two sprawling production facilities, employing more than 4,000 people?



The Honda of Canada Manufacturing (HCM) facility in Alliston is one of the assembly operations directly affected by parts shortages.



The vast majority of Honda’s parts and materials are sourced here in North America, but Japan is still a critical source.



“A few critical parts continue to be supplied from Japan,” said Honda Canada executive vice president Jerry Chenkin at Honda Canada’s new, eco-driven headquarters in Markham. “At this time, many of Honda’s Japan-based parts suppliers have resumed production and most are functioning at 50 per cent or better capacity.”



Chenkin said Honda is working diligently and closely with the few suppliers that have yet to resume production to re-establish their operations, while also evaluating additional sources for some parts in the supply chain.



However, the situation changes constantly, a fact borne out by twice-a-day conference calls with the worldwide corporate head office and parts facilities in Japan, he added.



HCM in Alliston and other plants around the world have been forced to cut back operations, limiting overall production.



Following the tsunami, workers on the production lines reported for duty and worked on the line for half their normal shift. The balance of their hours was not been cut, though. They performed other work around the plant on a first come, first serve basis. And, during most non-production periods, HCM employees have the option to take time off without pay, cover the time off with vacation, or report to work for non-production activities that might include cleaning and maintenance, additional training, and involvement in a wide variety of projects.



Honda is doing all that it can to insulate their local workers from the effects of the disaster many time zones away.



“Honda remains focused on minimizing the impact to associates and their families, and plans no layoffs at any of its North American facilities,” Chenkin said.



Honda started reducing production at various North American plants at the end of March since their supply chain system, like most in the industry, allows for between 30 and 40 days of uninterrupted production. But the shortage of key parts has grown more acute as the company struggles to resume operations in Japan or find alternative sources for components.



Unfortunately, this necessary move comes at a bad time for Honda.The versatile Alliston plants assemble the Honda Civic (coupe, sedan and Si models), as well as the Acura ZDX, MDX and CSX.



On April 20, Honda launched the ninth generation of the Honda Civic in five different models. For the last 13 consecutive years, the Civic has been the best selling passenger vehicle in Canada.



Production on the 2012 Civic line began back in January in Alliston, and according to sources, 10,000 to 12,000 units should have been ready to ship by launch time.



However, between Canada and the US, some 30,000 to 35,000 Civics are sold in an average month.



For the 2012 model year, Honda will likely be facing greater competition from other Asian-based rivals – specifically the Toyota Corolla, the Hyundai Elantra and the Mazda 3.



Implications felt half a world away

What are the implications for Alliston, Simcoe, Ontario, Canada and even the rest of the world after the earthquake and tsunami in Japan last spring?



Honda Canada spokesperson Richard Jacobs said dealers will continue to receive Civics and other models, but the impact will vary in different regions depending on demand. Jacobs also said it remains unclear if Civic buyers will experience significant wait times for their new models.



“We’re not really sure yet what the extent of the impact will be and when and how much it will be,” he added.



Among other implications, Honda says it will now delay the launch of the new generation 2012 CR-V sport utility vehicle by at least a month. Honda will extend output of the 2011 model. CR-Vs are presently being built for the North American market in Ohio.



Production for this vehicle will shift to Alliston for 2012 – a testament to the value Honda places on the region’s capabilities.



Honda said it would continue to make decisions based on the status of the recovery in Japan and on the stream of parts. However, a parts shortage still remains a concern.



“Honda is making every effort to work toward a full recovery as quickly as possible,” Chenkin said. “We appreciate everyone’s understanding during these challenging times.”



Honda has managed the unprecedented parts supply issues that resulted from the devastating impact of the March 11 earthquake and tsunami in Japan with no layoffs at any of its 14 production plants in North America.



“We are particularly proud of the efforts of our manufacturing team in Alliston,” said Chenkin, “and we applaud them for the steps they have taken to keep our associates working together as a team during this difficult period... We still have challenges to overcome, but once we have normalized operations we will owe them a great debt of thanks.”



Giving back

In recent weeks, with input from associates and HCM management, some employees have even been working offsite, helping out organizations in the community.



Organizations that have benefited from these “volunteer” initiatives include the Alliston and District Humane Society, the Alliston Good Shepherd Food Bank and the Barrie Food Bank.



At the human society, Honda employees have been building an outdoor shelter, cleaning and helping out with the animals. At the Alliston food bank, they’ve been prepping and painting rooms and offices and are on standby for additional work. In Barrie, they’ve been helping move all stored food from the old fire hall to the Food Bank’s temporary location before the move to new centralized quarters on Anne Street – an enormous undertaking.



Lori Van Valkenburg, with Honda, said HCM also provided assistance at the Habitat for Humanity in Alliston.



“Every little bit helps – everyone,” she said. “It’s a winning situation for all involved, including the community and HCM associates. The advantages to everyone are practically immediate – and far reaching.”



As the supply of parts from Japan improves, production will ramp-up in August on a step-by-step, plant-by-plant and model-by-model basis, with production gradually returning to 100 per cent of the original plan in Honda plants across North America – including Alliston ¬– in September.



However, production of the new 2012 Civic line-up will continue at a reduced rate of approximately 50 per cent due to the limited supply of specific key components. Full production is expected to resume sometime in the fall.



Positive turnaround

“We are pleased to see a positive turnaround represented by this significant improvement in our production situation,” said Chenkin. “Throughout this crisis, Honda has been working hard to achieve a speedy recovery, while maintaining a focus on our longer-term plans for continued growth in sales and production in order to meet the growing needs of our customers.”



A review of sales figures for all models and brands sold in Canada in May, June and even July show expected reductions in most models sold. However, the figures may also be a little misleading and the downturn may not all be directed to recent cataclysmic events. There were significant declines in sales pretty much across the board.



A few days ago, the parent company in Japan, Honda Motor Co., Ltd. reported an 88 per cent plunge in first-quarter profits after the earthquake and subsequent tsunami. An overall net profit of $481 million was announced. However, in a sign that conditions are improving, Honda raised its full-year earnings forecast by 35 per cent.



Given the constraints the company had to work through during the reporting period, the numbers are better than expected, analysts said. "I think Honda deserves some credit for the first quarter, in which some expected the firm to post losses," said Naoki Fuiwara, a fund manager at Shinkin Asset Management with head offices in Tokyo, Japan.



Source;

http://www.simcoe.com/news/article/1052194--honda-gives-back