TOKYO -- In an effort to alleviate losses from the yen's rapid rise against the dollar, Honda Motor Co. may move production of the popular Fit small car to the United States.
President Takanobu Ito called the shift a “highly likely possibility.”
“Considering the foreign exchange, such a structural reform might be called for,” Ito told Automotive News in an interview today. “That is the sort of direction we are considering.”
The fuel-efficient Fit has weathered the U.S. market slump better than its bigger counterparts in Honda's lineup. Sales of the hatchback were down 12 percent to 55,475 units for the first nine months of the year, compared with a 25 percent drop for all of American Honda's lineup.
But all Fits are imported from Japan. And the yen's 8 percent increase in value against the dollar since August has made their already small profit margins even smaller. A higher yen reduces the value of dollar-denominated revenues that are repatriated to Japan.
About 80 percent of the cars Honda sells in the States are made locally; the rest are imported. Ito said he wants to keep that ratio. But he wants imports to be more high-tech models such as hybrid vehicles, which require the special suppliers and manufacturing plants found in Japan.
“If we could shift this 20 percent to other, higher-value-added technologies, that would be good,” Ito said.
He did not say where in the United States the Fit might be built.