Honda releases medium-term strategy (2)

North American exports to top 200,000 units after 2014

2013/01/08

Summary

The Honda Civic
The Honda Civic after major freshening and released
for sale in North America in November 2012

 Honda published its medium-term strategy in September 2012 announcing plans to sell more than three million vehicles in mature markets, another three million vehicles in emerging markets, six million vehicles in total, in FY2016 (sales in FY2012 are expected to be 4.12 million units).

 This report, "Honda releases medium-term strategy (2)," contains Honda's plans to increase its development and production capabilities outside of Japan, namely North America, Europe, Asia (other than China) and Brazil.

 North America will remain Honda's largest market through FY2016 as the company plans to increase its sales from 1.74 million units (forecast for FY2012) to 2 million units in FY2016. To avoid the influence of the yen's appreciation, Honda plans to decrease export from Japan and strengthen North America as its new export base. Export from North America will exceed import from Japan (into North America) in 2014. Honda also plans to export its vehicles in the order of 200,000 units in the near future. To achieve these goals, Honda has plans for substantial increase of its production capacity. When its second plant in Mexico starts operation in 2014, Honda's capacity in North America will increase to 1.92 million units and maybe more.

 As for Europe, Honda has been operating in deficits since FY2009. Honda is introducing newly-developed diesel engines and other products to strengthen its product appeal in Europe. The next Fit (Jazz) will not be produced in the U.K. plant and Honda will concentrate on producing the Civic and CR-V to recover profitability.

 In Asian countries other than China, Honda plans to increase its unit sales substantially from approximately 200,000 units in FY2011 to 1.2 million units in FY2016.

 In South East Asia, Honda will increase production capacities in Thailand, Indonesia and Malaysia, and establish a complementary supply structure in the ASEAN region to improve efficiency of production at all locations. Starting in 2013, Honda will produce diesel engines in India that will be used in small-sized vehicles.

 In Brazil, Honda will strengthen the development capabilities as part of the company's concurrent development plan by all six regions. The small-sized vehicles for Brazilian market will be developed locally in Brazil.


Related report:
Honda releases medium-term strategy (1) The all-new Fit to be developed in six regions (posted in December 2012)