TOKYO -- Honda Motor Co. last week confirmed that it is studying the possibility of adding a subcompact to its U.S. lineup in an effort to lure young customers back into its showrooms.
The car under discussion - described by a Honda source as "a model that's below the Civic"- likely would be based on the Fit, the best-selling car in Japan in 2002.
"We're thinking of it positively," the source said, confirming a Japanese press report. "But we haven't made any decisions on it."
A new entry-level model could help Honda recapture young buyers who have been shifting away from the Civic to rivals such as Toyota Motor Corp.'s Scion brand.
Reporting earnings last week for its fiscal third quarter ended Dec. 31, Honda revised downward its North American sales estimates for the fiscal year through March to 1.550 million, from the 1.565 million it had forecast last October.
A major reason for the downward revision: "The Civic is slipping," says Koichi Amemiya, Honda's executive vice president in charge of North American operations
Honda said its consolidated, or group, net income for the three months leapt 31.2 percent from a year earlier to a record $1.4 billion on revenue of $18.6 billion, little changed. Operating profit rose 1.4 percent to $1.5 billion, it said.
Honda said the decline of the dollar to an average ¥113, from ¥121 in the previous quarter, slashed $352.8 million from operating results. A stronger yen translates into less profit in yen terms from every dollar received from sales overseas.