Honda to boost exports from Japan, Europe to North America

Honda Boss - Takahiro Hachigo

TOKYO -- Honda Motor will make more cars in Japan and increase shipments from Japan and Europe to the robust North American market to better utilize its global supply capacity, the company's chief said Wednesday.
     Speaking at a press conference in Tokyo, President Takahiro Hachigo outlined plans to revamp operations in key regions to eliminate underutilized capacity by 2020, while also sharpening the company's focus on green and safety-related technologies.
Catching up with oversized capacity
Honda has established self-sufficient production and sales operations in each of its six key markets including Japan, China, North America and Europe. Hoping to ease dependence on North American earnings, the company in fiscal 2012 set a target to increase global sales 50% to 6 million vehicles by fiscal 2016.
     In line with this aggressive goal, the automaker sharply increased output capacity to 5.55 million units a year. But sales in 2015 totaled 4.67 million vehicles, leaving capacity underutilized by nearly 900,000 units. Last year, Honda's North American and Chinese sales rose to record levels, but sales in Japan shrank 14.4%, and Europe was also sluggish.
     For fiscal 2016, Honda plans to build 160,000 vehicles in Japan for export, nearly double on the year. It is considering producing once again the CR-V sport utility vehicle and the global flagship sedan Civic -- popular in North America -- here in 2017 and beyond.
     Honda stopped Japanese production of the Civic in 2010. But a revamped version designed for the U.S. market may be made and sold in Japan within two years. For shipments to Europe, Honda plans to add two SUV models to its current production lineup of compacts.
     The automaker plans to ramp up total Japanese output by roughly 200,000 vehicles over three to four years from 730,000 vehicles in 2015, Hachigo said.
     In Europe, Honda will focus on making the new Civic hatchback and start full-blown exports of the model to North America to raise operating rates of existing facilities.
     Through these steps, the company is scrambling to create a framework in which operations in Japan, the U.S. and Europe flexibly supply global key models to each other.