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Honda Aims to Boost Production Capacity in Asia

Tue, 12/18/2012 - 11:17am
The Associated Press

TOKYO, Dec. 18 (Kyodo) — Honda Motor Co. President Takanobu Ito said Tuesday the company is eyeing a continued production capacity boost in emerging Asian countries to help achieve its goal of doubling global auto sales to more than 6 million units in five years through fiscal 2016.

"We'll definitely have to beef up production capacity (to meet demand) in the growing Asian markets," Ito said in an interview with Kyodo News.

While stopping short of elaborating on the production plan for Asia excluding Japan and China, he said such an output increase is necessary as the company no longer relies on aggressive exports from Japan given the strong yen.

The Japanese automaker's annual production capacity in Asia, excluding China and Japan, currently stands at 575,000 vehicles, accounting for around 12 percent of its global production capacity. It has plants in Thailand, Indonesia, India and Malaysia, among other countries.

In achieving its global sales target, Honda has high hopes for sales of compact models in emerging markets. The company is aiming to increase its sales in emerging markets to 3 million units in fiscal 2016 ending in March 2017, nearly double from fiscal 2011.

Along with the production increase in Asia, Ito said he wants to increase Honda's exports from the United States to help counter the yen's strength and meet demand elsewhere. The automaker plans to boost annual production capacity in North America to 1.92 million units per year in 2014 after its new plant in Mexico becomes operational, compared with the current 1.63 million units.

Around 20 percent of the total U.S.-assembled vehicles will be shipped outside the country, according to Honda.

Noting that North America is a key Honda market, Ito said, "Our production is concentrated there and it's more efficient to make cars there and export from there."

"Even if the yen's appreciation would be corrected, we're not going to be churning out (vehicles) in Japan anymore. Local production and local consumption is the basic (strategy)," he added.

 

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