Honda says N.A. plants could grow
CEO: Sales could top 2 million units by 2016
Iwamura: Sales drive plant plan.
American Honda Motor Co. is prepared to boost production capacity in the United States, Canada or at its plant under construction in Mexico, depending on which vehicle segments have the most growth in the next few years.
By 2016, Honda's North American sales will rise to "more than 2 million" units, from about 1.7 million this year, Tetsuo Iwamura, CEO of American Honda, told Automotive News.
Globally, Honda is working to raise sales 50 percent within four years to 6 million vehicles, with most of the growth coming from developing countries such as India, China and Brazil. Its North American goal amounts to an 18 percent increase.
The overall market's rising tide should largely lift Honda to its North American goal. Forecasts from IHS Automotive and LMC Automotive show light-vehicle sales for the region increasing about 15 percent during the same period.
Iwamura said he expects Honda to increase sales in all segments but particularly in small cars, with the help of vehicles from the plant it is building in Mexico. Honda initially plans to assemble 200,000 small cars annually at the plant, which is scheduled to open in 2014.
"If the market allows us, of course, we won't hesitate to expand capacity," Iwamura said.
The Mexico plant will only build small cars, including "multiple" derivatives of the Fit subcompact, Iwamura said. So if demand for the mid-sized Accord or other larger models increases, Honda might need to increase output at the U.S. or Canadian plants that build those nameplates.
Honda already intends to add 40,000 units of capacity next year at its Lincoln, Ala., plant, which makes the Odyssey, Pilot and Ridgeline.
The company is on pace to sell about 1.47 million cars and trucks in the United States this year, Iwamura said. That would be a 28 percent increase from 2011, when many of its plants around the world were crippled in the aftermath of an earthquake in Japan and flooding in Thailand.
Its U.S. sales rose 24 percent in the first three quarters of 2012, including a 40 percent gain for the Civic compact and 37 percent increase for the Accord, Honda's highest-volume model. A redesigned Accord sedan arrived at dealerships about a month ago, and the 2013 coupe went on sale last week.
Honda sold 247,847 Accords through September and is targeting annual sales of 350,000 as a result of the redesign. That is still short of the 400,000 Accords that Honda regularly sold a decade ago.
Iwamura said that he would like the Accord to hit 400,000 again, but that doing so is harder now because the overall market is smaller and Honda is up against stronger mid-sized competition.
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