LOS ANGELES -- American Honda is considering stretching the model cycles of some vehicles by a year as part of its global cost-cutting program.
Most Honda cars run a five-year cycle between redesigns, and minivans and SUVs run six or seven years. But with auto sales in the tank, Honda may cut costs by extending those cycles.
But longer cycles have drawbacks: the possibility of higher incentives to move older metal; concerns about durability of tooling; and effects on Honda's global platform strategy.
"We're being cost-conscious, so we have to look at it," said John Watts, senior manager of Acura product planning. "The cost of vehicle development continues to go up, so you have to look at return on investment. But it's a tough call. Timing is everything."
Honda has said it plans major budget cuts for the fiscal year ending March 31, 2010, including $3.81 billion in sales and administrative expenses and $503.4 million, or 8.5 percent, in r&d spending.
This wouldn't be the first time a Japanese maker recently stretched a product cycle. Toyota extended the scheduled 2007 redesign of its U.S.-edition Corolla compact by a year because engineering resources were spread too thin. Although incentive spending increased in that final year, sales stayed strong and Toyota considered the decision a success.