Honda targets 50% sales jump
Emerging markets, small cars are vital
TOKYO -- A new Fit-based crossover that could come to U.S. showrooms is one of several new models that will support Honda Motor Co.'s ambitious new growth plan.
Others due in the next few years include a new Civic Type-R and an open-cockpit mini sporty car.
President Takanobu Ito's new business plan aims to boost global sales 50 percent to 6 million vehicles in the next four years, largely on sales of small cars such as the Fit and their derivatives. Much of the increase will come in emerging markets.
In the current fiscal year ending March 31, 2013, Honda forecasts record sales of 4.2 million, up 35 percent from the earthquake-disrupted prior fiscal year. Honda sold 3.6 million vehicles in calendar 2012.
"This is a big number," Ito said of the 6 million target. "It's a declaration of our determination. Can we really make it by 2016? It's really a question of how much the Fit contributes to global sales."
Ito said the standard Fit and a derivative would be made at Honda's new assembly plant in Mexico starting in the spring of 2014. That factory's main mission is to supply the United States. The derivative could be the crossover or a Fit-based sedan.
Meanwhile, the new high-performance Civic will go on sale in Europe in 2015. Ito declined to say whether it would reach North America. But he said there is demand in other markets. The Civic Type-R was phased out in 2010.
The redesigned Fit debuts next year. It will be the first model created through Honda's overhauled r&d approach. Ito aims to slash lead time and costs by simultaneously developing the same global model at technical centers around the world.
The CEO said his new approach will halve the time needed to get new cars to market. Right now it would take four years to deliver three different nameplates. That will fall to two.
"The key to growth is smaller cars and newer markets," said Kurt Sanger, an auto analyst at Deutsche Securities in Tokyo. "Even U.S. growth is predicated, it seems, on expanding the Fit lineup with derivative models from that."
Small cars, exemplified by the Fit and a tinier car called the Brio, will fuel growth in booming emerging markets.
Honda’s Ito: 6 million global sales in next four years
Photo credit: BLOOMBERG
Last year Honda sold 1.5 million vehicles, or 42 percent of its global total, in emerging markets. By 2017 that should double to 3 million, or half of all sales.
Mature markets, including the United States, Japan and Europe, will account for the remaining 3 million of the 6 million target. Honda sold 2.06 million to that group last year.
The mini sports car will be one of six new minivehicles Honda plans to sell in Japan by the end of 2015. It will be based on the EV-ster, a two-seat electric roadster shown at last year's Tokyo Motor Show. But Honda gave it a traditional gasoline engine to improve performance and lower its price.
It's unclear whether that car will come to the United States. Japan's minicars fill a special segment that is restricted in both body size and engine displacement, and few make it overseas.
At home, Honda increasingly will shift domestic production away from exports. Minicar production will be consolidated at Honda's Suzuka plant south of Nagoya. Production of small cars, including the Fit, will be shifted to its new Yorii plant north of Tokyo, which opens in July 2013.
Meanwhile, the older Sayama plant, also just north of Tokyo, will be overhauled to ramp up efficiency and flexibility. Honda wants its two lines to be able to churn out 10 different models, compared with seven now.
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