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Lower demand for SUVs in U.S. prompts move
By By Makiko Kitamura|
Bloomberg News|
Published on Friday, Sep 26, 2008
Honda Motor Co., Japan's second-largest carmaker, cut global production last month as the company built fewer sport-utility vehicles in North America.
Honda's output fell 4.8 percent to 295,541 vehicles in August, led by a 10.2 percent drop in the U.S., the company said.
Honda will make 50,000 fewer Pilot SUVs and Odyssey minivans than originally planned between August and October in the U.S.
Truck sales in the country plunged 22 percent last month as falling home values and gasoline prices near $4 a gallon crimped demand.
''It's the perfect storm,'' said Hirofumi Yokoi, a Tokyo-based analyst at automotive consulting company CSM Worldwide. ''High gas prices, the mortgage crisis, tighter credit for loans — they're all having a big impact on car demand and production.''
U.S. new vehicle sales could fall to 14.2 million units, the lowest total in 15 years, according to market researcher J.D. Power & Associates.
''We don't expect a recovery before 2010,'' Yokoi said.
''The sudden change in the U.S. economy will sooner or later lead to a global slowdown,'' said Osamu Suzuki, Chairman of Suzuki Motor Corp.
Domestic output also fell 10.5 percent compared with the year earlier period, when car makers made up for losses after a July 16 earthquake.
Honda is expanding in China and Russia to reduce its reliance on North America, where the Tokyo-based automaker gets about 70 percent of its operating profit.
Honda said on Sept. 19 it will raise production capacity in Turkey by 26 percent to 63,000 vehicles a year by the middle of next year to meet rising demand in Russia. Honda's sales in the country have more than doubled this year through August.
Honda is also setting up a second factory in India in the northern Rajasthan state. Honda makes City, Civic and Accords in India and imports CR-Vs.
Mazda Motor Corp., a third owned by Ford Motor Co., said global production rose 4.1 percent to 97,242 vehicles.
Subaru-maker Fuji Heavy Industries Ltd. built 46,797 vehicles worldwide, a decrease of 7.2 percent.
Honda Motor Co., Japan's second-largest carmaker, cut global production last month as the company built fewer sport-utility vehicles in North America.
Get the full article here.
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