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 President Sees Limited Role for Electric Cars

Very interesting read....
By Brad Berman
onda’s display at the 2011 Tokyo Auto Show is full of electric car concepts. Earlier this week, international journalists were given the opportunity to drive its impressive Fit EV pure battery electric car. So, when given the opportunity to ask a single question at yesterday’s press conference with Honda President Takanobu Ito at the Tokyo show, I tried to determine if the company’s man at the top has a vision for electric cars.

I’ll let Mr. Ito speak for himself in this unedited transcript of my question and his answer.
In your earlier comments, you identified the need for Honda to be ahead of your competitors on technology, especially hybrid and electric. Nissan is projecting to have 1.5 million cumulative sales of electric cars by 2015. What do you think of this forecast, and Honda’s ability to compete with pure electric vehicles?

First of all, just because Nissan is saying it’s going to sell some 1.5 million pure EVs, Honda is not going to say that [we are] as well. Instead, our way of thinking is, for us to contribute to sustainable society, we have to think about total sales of Honda vehicles, and thereby through our products, contribute to society.

With this in mind, compared to the year 2000, we need to reduce our CO2 emissions by 2020 by 30 percent. Pure battery EVs, of course, would be one means of trying to reduce CO2. I think there is no mistake about that.

I think the way people use cars is not the same across the board in all countries, so I cannot generalize. If you think about the concept EVs introduced by Honda at this Tokyo Motor Show, you see that electric cars are important. I will not deny that. But when you consider the performance of batteries, the charging times, plus the cost of batteries, I think pure EVs would be best for compact, very small cars.

I feel confident in saying that they could be a fit for very small vehicles. That is why last year we launched the motorcycle EV. We think we should expand on this and for mini-vehicles, an even smaller size category—the commuter car we introduced at the Tokyo Motor Show, which would be well suited for a pure EV.

Will this be acceptable in the United States? This is a question. Therefore, we are thinking of the Fit EV for the United States. But for Japan, Europe, and other parts of Asia—especially the urban areas, we think the smaller category would be an option that could be considered, if it could be easily charged and has good maneuverability. In this category, pure EVs would be appropriate.

So, we’ll start with the very small cars for the pure battery EVs. But when you think about other segments—compact cars and large vehicles—in order to contribute to sustainable society, fuel economy and reduction of CO2, I believe hybrids would be the best.

When I say hybrids, there are different types of hybrids. Honda has to think about what would be best for each of the categories. For example, we have strength in the one-motor system—a very simple IMA (Integrated Motor Assist). This is one thing that we feel is fit for this purpose. We think we can increase the number of sales, and we are preparing the next version of the IMA, trying to improve the performance.

For vehicles in the United States, say the Accord class, we have to secure sufficient motor performance. We have to further work on this to generate enough power during the driving. For this, we have to have a separate dedicated system for the Accord class and above.

If you’re talking about high-end expensive vehicles, fuel economy is not enough. It also has to be fun to drive. For that we have the SH-AWD [Honda’s new hybrid system primarily dedicated to enhancing driving dynamics]. For each class of car, there are different types of hybrids. We believe we already have the technology in our hands, and for the next 10 to 20 years, I think in order to reduce CO2, we would have to use these different technologies, of which pure battery cars are one. But proportion-wise, I think hybrids will be the largest.

What Gets His Motor Going
In the final question of the session, an American journalist followed up on the idea of Honda adding “more fun” to its vehicles—a notion that was frequently discussed in presentations to journalists in the past few days in Tokyo. The journalist mentioned Honda’s electric sports car concept on display.

“I would love to have an electric sports car, but I live in an apartment complex, so I’d have to run an extension cord across my parking lot in order to recharge it,” he said. “[Honda] used to have affordable sports coupes that were iconic around the world, the CRX, the Integra, Prelude, those cars that every man could afford that actually ran on gas. Is a car like that on the table, or does every future sports car need to have some sort of advanced powertrain. It seems like a gas powertrain might be more affordable to the masses.”

Mr. Ito broke into a smile and, for the first time in the one-hour conference, delivered his response in English—a single line: “I completely agree with you.”

Source;
http://www.plugincars.com/honda-president-sees-limited-role-electric-cars-110639.html

Honda CEO Interview