Where others see gloom, Honda chief sees boom in U.S.

TOKYO — Honda President Takeo Fukui is bullishly forecasting that his company's U.S. sales will rise this year, despite new fears that the market volume will plunge below 15 million vehicles.

"At the end of last year, the market was forecast in the mid-15 million units, and it may be that they have pushed that number downward," Fukui told Automotive News last week. "But as far as Honda is concerned, we don't believe there are going to be any major changes."

Earlier this year, Honda said combined U.S. sales of Honda and Acura vehicles should climb 2.6 percent in 2008 to 1.59 million units.

Fukui's outlook came a day after J.D. Power and Associates lowered its 2008 U.S. sales forecast to 14.95 million light vehicles — the lowest projection from a major industry observer.

Most people watching the industry expect 15.5 million to 15.7 million U.S. vehicle sales this year, down from 16.2 million in 2007.

By the end of February, U.S. sales for Honda and Acura were up 1.5 percent for the year, compared with a 5.3 percent slump in the overall market.

Honda is benefiting from increased demand for its fuel-efficient cars as drivers recoil from high gasoline prices. U.S. sales are expected to get a further boost later this year when the company releases its redesigned Fit subcompact, which arrived at Japanese showrooms last year.

Fukui conceded Honda had not anticipated the booming demand for the first- generation Fit. It was introduced to the United States in 2006, nearly five years after its world debut.

"We are behind in production even for the Fit currently being shipped to the United States," Fukui said. "It probably would have been good if we launched it a year earlier."

In 2007, Honda sold 56,432 Fits, more than either the Element crossover or Ridgeline pickup.

Fukui also said there is no change in the U.S. sales forecast for the Accord. The company is still counting on a small year-over-year increase from last year's 392,231.

Even with sales looking up, Fukui says the overall slowdown will affect U.S. production plans. Honda's new Indiana assembly plant is scheduled to come online this fall, but there is less pressure to crank up output.

"We are going to start operations in Indiana," Fukui said, "and we believe we don't have to be too expeditious about the ramp-up."

You can reach Hans Greimel at hgreimel@crain.com

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