Honda finds more production space

New Alabama plant frees capacity for more sport-utilities

Top 5 minivans in 2001
Segment sales leaders through November
  Sales Jan.-Nov. % Change from 2000
1. Dodge Caravan/Grand Caravan 223,570 -17.6
2. Ford Windstar 168,824 -19.1
3. Chrysler Town & Country 130,297 42.4
4. Honda Odyssey 118,503 1
5. Chevrolet Venture 82,688 -10
Source: Automotive News Data Center

LINCOLN, Ala. — The opening of Honda Motor Co.’s assembly plant here accomplishes two goals for the automaker:

1. It boosts supplies of the popular Honda Odyssey minivan. Now in its third year of production, the vehicle still generates waiting lists at dealers.

2. It frees up capacity at the Alliston, Ontario, assembly plant for more sport-utilities.

According to Koichi Amemiya, chairman of American Honda Motor Co. and head of all Honda operations in the Western Hemisphere, the plan is to shift all Odyssey minivan production from its original home in Alliston to the Alabama factory.

That will free Alliston to build more sport-utilities, Amemiya said. Honda has indicated it wants to build a Honda-brand sport-utility from the Odyssey platform. But it has not revealed specific plans to enter the market, as Toyota Motor Corp. has done and Nissan Motor Co. has said it will do.

In May 1999, when it announced the Alabama project, Honda said the plant’s output would augment Odyssey production in Alliston.

Shift in plans

But at the ceremonial opening in Alabama on Tuesday, Dec. 4, company officials said Honda has spent $100 million more than originally announced on the plant to increase annual capacity from 120,000 units to 150,000 units. The extra money was put toward a larger paint oven and more assembly line robots.

Honda officials said that will be enough to fill orders for Odysseys for the foreseeable future. Through November, Honda has sold 118,503 Odyssey minivans, up 1.0 percent from the same period last year.

Future sport-utility

Alliston also builds the popular Acura MDX sport-utility, which shares a platform with the Odyssey.

But Honda Division has no competitive equivalent in the segment. Honda’s only two sport-utilities are the small CR-V and the aging Passport. The Passport is a rebadged Isuzu Rodeo built in Isuzu’s U.S. joint venture, Subaru-Isuzu Automotive Inc.

Alliston builds only about 45,000 MDXs a year. Once the Odyssey is removed, Honda will have nearly 150,000 units of available capacity to mount a mid-sized sport-utility market entry.

Honda said it has begun transferring stamping dies from Canada to Alabama.

If Honda threw the combined capacity of the Alabama and Alliston plants into minivans, it could challenge the Big 3’s dominance in the segment. But Honda does not envision much growth for its minivan, said Charles Schnieber, product planner for the Odyssey.

“Our sales are up, but minivan sales for the industry are down 22 percent this year,” Schneiber said. “You have to wonder where the minivan market is going. We believe 150,000 units is about where we’ll be for now.”

You can reach Lindsay Chappell at lchappell@crain.com

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