TOKYO -- Honda Motor Co. is carefully allocating shipments of cars to the United States because its exports there from Japan are "losing money," CFO Fumihiko Ike said.
Honda won't cut off all shipments of those imported nameplates, including the Fit subcompact and the Insight and CR-Z hybrids, Ike said. But he said the company needs to minimize the impact of such shipments on its balance sheet.
That means that in some cases dealers are getting fewer vehicles than they might like.
The long-term solution: Move more production to North America and buy more parts there, including components for hybrid powertrains.
"Under the current exchange rate of 80 yen per dollar, our export business doesn't make any profit," Ike told Automotive News. "Definitely, the absolute number of exports to the United States will be decreasing."
It's the first time a Japanese automaker has admitted that sending vehicles from Japan to the United States is a money-losing proposition.
Honda relies less on exports from Japan to the United States than its rivals and therefore is less exposed to losses from currency exchange rates. Honda already builds in North America roughly 85 percent of the vehicles that it sells there.
Toyota Motor Corp. and Nissan Motor Co., which build about 70 percent of their North American sales volume locally, also are reeling from exchange rate losses and scrambling to shift production of vehicles and components to North America.
Ike's comments suggest that his rivals are under even greater pressure to transfer production from Japan to North America.
Nissan said in January 2011 that it aims to halve the value of components and the number of vehicles it brings from Japan by early 2014. Toyota wants to build hybrids with locally sourced components in North America by 2015.
Honda keeps selling its money-losing exports in the United States partly to keep segments covered and retain customers.
"We need to keep our customer base," Ike said. Exports of money-losers will continue "just for the sake of our dealers. At least they have something" to sell.
"Especially last year because of the shortage of supply, American Honda didn't have enough cars to sell," he said, so the Japanese automaker kept shipping cars, such as certain Acuras and hybrid models, to the United States despite losses on those exports.
Honda already is tackling the problem. It will transfer production of the Fit small car to a plant that will open in Mexico in 2014. The Fit accounted for roughly a third of Honda's U.S. imports in 2010 and 2011.
In addition, the 2013 Acura ILX, which went on sale at the end of May, originally was planned for Honda's Sayama plant in Japan but instead is being built in Greensburg, Ind. It eventually may replace the imported TSX, although Honda has not confirmed that.