Bloomberg News

Honda Makes Accords at Record Pace Amid Midsize Car Fight

September 17, 2012

Honda Makes Accords at Record Pace Amid U.S. Midsize Sedan Melee

The Honda Motor Co. exhibit during the 2012 North American International Auto Show (NAIAS) in Detroit. Photographer: Scott Eells/Bloomberg

Honda Motor Co. is building the new Accord sedan at a record rate so dealers can begin sales this week as U.S. competition with midsize cars from Toyota Motor Corp. (7203), Nissan Motor Co. and Ford (F:US) Motor Co. intensifies.

Production of the 2013 Accord was at 6,000 units a week and rising at Honda’s Marysville, Ohio, plant as of Sept. 14, Mike Fischer, production leader for the car, said in an interview. No new Honda model has been built at a faster pace and with fewer flaws, he said.

“We’re at a benchmark pace,” said Fischer, an associate chief engineer for Tokyo-based Honda, without elaborating. “Typically, some of our initial indicators for a production ramp-up are set for a three-month level. We’ve challenged ourselves to meet that in one month.”

The ninth-generation Accord begins selling Sept. 19 as Nissan boosts output of a revamped Altima, Toyota expands deliveries of the Camry and Ford readies a restyled Fusion. Midsize cars are the biggest sales segment in the U.S. this year, up 22 percent through August to 2.52 million and outpacing the 15 percent increase for all cars and light trucks, according to Woodcliff Lake, New Jersey-based Autodata Corp.

Camry, redesigned in 2011, remains the best-selling U.S. car, up 37 percent this year to 280,536. The 2012 Accord follows with sales of 218,665, ahead of Altima at 209,592 and Fusion at 181,865.

“Midsize sedans are where everyone is putting their resources right now,” said Michael Robinet, managing director for industry consultant IHS Automotive based in Northville, Michigan. “It’s a knockdown, drag-out battle in that segment.”

Production Pace

Output of LX, Sport and EX grades of Honda’s flagship sedan with four- and six-cylinder engines will grow throughout the year at the Ohio plant, Fischer said. Production of the 2013 sedan began Aug. 20 and a redesigned Accord coupe will also be made in Marysville starting next month. The plant has produced Accords since 1982.

“We’ll be continuing to ramp our production to what that actual peak market condition will be,” Fischer said, without elaborating.

Nissan has raised output of 2013 Altimas at plants in Tennessee and Mississippi since May and will further accelerate the pace when both factories build it on three-shift schedules later this year, said Katherine Zachary, a company spokeswoman. As much as 90 percent of Altima sales this month will be of the new car as dealers sell out of 2012 models, she said.

Honda’s goal is to sell 350,000 of its new Accords annually in the U.S. Nissan hasn’t set a similar target for Altima. The automaker can build about 300,000 annually and as many as 400,000 by 2013 should demand reach that level, Bill Krueger, Nissan’s vice chairman of the Americas, said in May.

Ford’s Fusion

Ford is beginning to make 2013 Fusions at a factory in Mexico and starts advertising the car in October. The model will also be built at Ford’s Flat Rock, Michigan, plant in 2013, where the Dearborn, Michigan-based automaker is to add a second shift of 1,200 workers, Mark Fields, the company’s president of the Americas, said Sept. 10.

Honda’s North American plants rank among the industry’s best, based on J.D. Power & Associates’ annual initial quality survey. The company made the new Accord easier to build, in addition to a new look, engine and technical features.

Assembly process enhancements include a new sound damping material that’s sprayed on rather than applied as a sheet; a new one-piece dashboard that eliminates squeaks and rattles and is faster to install; and a new stamping press that shapes body panels more rapidly, all to accelerate production, Fischer said.

“We understand this car is the halo vehicle for the company,” he said. “This car is one of those benchmark products that we expect to do extremely well in the market.”

Honda’s American depositary receipts (HMC:US) fell 2.3 percent to $33.90 yesterday in New York. They have gained 11 percent this year. The company’s U.S. operations are based in Torrance, California.

To contact the reporter on this story: Alan Ohnsman in Los Angeles at aohnsman@bloomberg.net

To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net


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    (Ford Motor Co)
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  • HMC
    (Honda Motor Co Ltd)
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