Bloomberg News

Honda Plans to Become Net Exporter From North America

December 06, 2012

Honda Motor Co. (7267), Japan’s first automaker to build cars in the U.S., said its vehicle exports from North America will exceed imports into the region as production outside Japan grows.

Honda will be a net exporter as its plants in the U.S., Canada and Mexico take more responsibility for developing global models for sale in multiple countries, the Tokyo-based company said in a statement. The carmaker yesterday marked production of its 1 millionth U.S. export, a 2013 Accord sedan heading for South Korea, at its Marysville, Ohio, plant.

Three decades after the company began building vehicles in Marysville, the company is adding a factory in Mexico to produce Fit hatchbacks starting in 2014. U.S. sales of Honda and Acura brand autos are rebounding this year, up 24 percent through November, aided by a 57 percent surge in vehicle production at its North American plants.

“It’s something they can do, and they’ve got a supply base here they’re very comfortable with to achieve that,” said Alan Baum, principal of auto-industry researcher Baum & Associates in West Bloomfield, Michigan. “They already import so little it’s not that big a stretch for them to be a net exporter.”

With the addition of the Fit plant, Honda has said it will have capacity to build at least 1.9 million vehicles in North America annually, up from about 1.7 million this year.

Through November, 90 percent of Honda and Acura models sold in the U.S. were made in North America, with only 10 percent coming from Japan, the company said this week.

Supply Base

Revenue from about 90,000 vehicles being shipped abroad from North American factories will reach $3 billion in the fiscal year ending March 2013, Jim Burrell, Honda’s U.S. assistant vice president for export sales, said in a phone interview late yesterday. North American auto exports will rise to more than 100,000 cars and trucks next year, Burrell said.

The first Honda auto exports from the U.S. began in 1987, and “quality for the world, made in America, has been an important Honda commitment for the past 25 years,” President Takanobu Ito said in the statement.

Honda’s U.S. sales dipped 6.8 percent last year, the result of production disruptions caused by natural disasters in Asia that slowed North American plants for months due to parts shortages.

The company expects to deliver almost 1.46 million Honda and Acura brand vehicles this year in the U.S., up from 1.15 million a year ago, John Mendel, Honda’s U.S. executive vice president, said in an interview last month. The company’s U.S. deliveries totaled 1.29 million through November.

Toyota, Nissan

Toyota Motor Corp. (7203), Asia’s largest automaker, Nissan Motor Co. (7201) and other Japanese carmakers are also expanding production at North American plants and export to markets beyond the region to counter the threat of a strong yen eroding the profit of U.S. sales.

“While Toyota doesn’t have a specific target, the U.S. will continue to be a significant export hub for the company, as evidenced by a 52 percent increase in volume this year,” said Javier Moreno, a spokesman for Toyota’s North American unit. “We expect that number to continue to increase in the future.”

Nissan is also “trending” toward exporting more autos from North American plants than it imports into the region, said Travis Parman, a spokesman for the Yokohama-based company.

“Though not there yet, the tipping point comes when we localize production of Rogue at the end of 2013,” Parman said today in an e-mail. Nissan is preparing to build a redesigned version of the Rogue compact crossover, now produced in Japan, at its Smyrna, Tennessee, plant starting next year.

Honda’s U.S. headquarters are in Torrance, California. The company’s American depositary receipts gained 1.2 percent to $33.27 at the close in New York. They’ve risen 8.9 percent this year.

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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