Honda (2): further localization of its overseas operations
Plans to sell 1.43 million vehicles in the US, 750,000 in China in 2012
2012/02/13
- Summary
- Developing new models in six key regions of the world: To best meet local needs
- Model plans for North America: Launching new models vigorously since the end of 2011
- Increasing production in North America while decreasing exports from Japan
- US market: Plans to sell 1.43 million vehicles in 2012, up 25%, after normalization of stock and production
- Brazil: Reportedly investing approximately 43.6 billion yen to buy more local parts
- Europe: Boosting European business with the new Civic and the new CR-V
- China: Enhancing local development and purchasing functions with plans to sell 750,000 vehicles in 2012
- Asia: Starting production of the Brio in Thailand and India
Summary
Our previous report "Honda (1)" of January 30, 2012, contained Honda Motor's (i) sales increasing plans in Japan and (ii) the direction of product planning and powertrain plans.
This report "Honda (2)" contains Honda's (i) initiatives toward localization of production, development and purchasing activities and (ii) an overview of its product planning and sales plans for 2012 in its largest market, North America, and other key areas.
Honda's overseas operations are moving toward localization of development and purchasing activities as well as localization of production of assembled vehicles. As for emerging markets where growth is promised, Honda plans to develop specifications based on local standards and needs, increase the local content rates and introduce cost competitive products.
As a first step under those plans, Honda will start simultaneous model development in six key areas of the world (Japan, North America, China, Asia Pacific, South America and Europe). The first model to be developed will be the next Fit scheduled for launch in 2014. The basic design will be used in common but technical details and purchasing will reflect local needs and conditions.
Honda will enhance its structure in China that will allow local workers to develop products that meet the needs of the Chinese customers. According to Honda, its entry car, Brio, for emerging markets that were released for sale in 2011 in Thailand and India were built using different drawings to meet local conditions.
As for the Acura brand, Honda announced its development and production operation will take place in North America which is its largest market.
The Great East Japan Earthquake of March and floods in Thailand in October 2011 had a serious impact on Honda. The resulting stock shortage caused a decline in Honda's vehicle sales in 2011 from 1,230,000 units in 2010 to 1,147,000 in the United States, from 647,000 to 618,000 units in China. Anticipating that its production and stock will be normalized in 2012, Honda plans to launch new models vigorously and sell 1,430,000 units in the United States (up 25%), 750,000 units in China (up 21%).
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