Honda exec maps out North American growth strategy
Mexico President Felipe Calderon shakes hands in March with Honda CEO Takanobu Ito at a Honda de Mexico event to lay the foundation stone for the construction of the new plant in Celaya, Guanajuato.
Photo credit: Honda
WASHINGTON -- Honda Motor Co., seeking to elevate the role of North America in its global operations, plans to move more production here and make the region the center of activity for global vehicle launches -- shifting the responsibility away from Japan, a senior manufacturing executive said today.
The company already has committed to building the next-generation Acura NSX sports car in Ohio, and this spring it broke ground on a factory in Mexico to make the subcompact Fit, said Rick Schostek, Honda of America Manufacturing's senior vice president.
Once that plant opens in 2014, Honda will have eight factories in North America -- many building cars for export to Japan and other markets -- and produce 90 percent of the cars sold in the region locally, said Schostek, speaking at a Washington Automotive Press Association luncheon.
The plant also will increase Honda's production capacity in North America to 1.91 million units by early 2014 from 1.63 million today.
"That will really round out our North American strategy," Schostek said, noting that Honda will be building everything from subcompacts to supercars in its biggest sales market.
The move comes as Honda, like other Japanese automakers, continues to battle the profit-damaging effect of the yen's strength against the dollar, which has made it difficult to make money on cars built in Japan and shipped to the United States.
This year, Honda plans to export about 100,000 vehicles from North America, Schostek said.
The region also will take the lead in launching global vehicles, such as the Honda Accord and Civic.
Whereas before, Honda engineers and production officials would travel to Japan to prep for a model launch, they'll now get that training in North America, Schostek said.
He didn't give an exact time frame for the shift, noting only that it will happen after this fall's launch of the 2013 Accord and be phased in gradually starting in the next couple years.
The exchange rate fluctuations are only one factor behind Honda's efforts, Schostek said, noting that historically the company has strived to build cars locally.
Honda was the first Japanese automaker to open a U.S. plant, when in 1982 it began building the Accord in Marysville, Ohio. It is currently investing $1.6 billion in new manufacturing capabilities at its plants in North America.
Last year, American Honda Motor Co. sold 1.15 million vehicles, down 7 percent over 2010. But sales through June this year have rebounded to 700,982 -- a 15 percent gain over the same period last year in an overall market that also has risen 15 percent.