Tag Archive | "Honda Motor Co."

Honda Chief Toured Quake Site By Motorcycle

After the March 11 disasters, highways were closed and many roads were severed by the impact of the earthquake. But the man who runs Honda Motor Co. needed to get to Honda plants at Tochigi, about 100 kilometers north of Tokyo, as quickly as possible — a 43-year-old male employee died when the wall of a cafeteria crumbled, and 17 other Honda employees were injured at one of the company’s most important sites.

So Takanobu Ito, the top executive at the world’s biggest motorcycle maker by volume, took to his Honda CB1100 “naked” motorbike two days after the quake to get to the Tochigi facilities, a vehicle research center, a manufacturing-technology development subsidiary and a component factory. The CB100 is a company mainstay, the “naked” version carrying no fancy frills, reported The Wall Street Journal.

Even though the location, about 200 kilometers south of Sendai, is relatively far from the seismic source, a seismic intensity of seven was recorded on site when the massive 9.0 quake hit a month ago. Demonstrating the severity of the damage, Honda last Friday allowed reporters to visit a design room at the R&D center that was completely smashed by the quake. Most ceiling panels in the room fell on the floor and electric cables and air-conditioning ducts were hanging from the ceiling. About 1,000 engineers were transferred to its Saitama, Suzuka and Hamamatsu factories as a temporary measure so they can work closely with those in charge of manufacturing operations.

The 57-year-old executive said he first drove a Honda car from Tokyo to his house in Utsunomiya, in the same prefecture as Tochigi, taking back roads with the highway network from the capital closed. The CEO then changed to the still brand-new motorbike he bought last spring to approach the quake-hit area. The pearl white 1100cc-engine CB was able to roll through disrupted roads around the facilities that a car would find it hard to navigate, he said.

“I saw quite a lot of roads closed right after the quake,” Mr. Ito said. “I drove around by my motorcycle from my home, and it worked,” he told reporters at the research center in Hagamachi, Tochigi.

Despite the scale of the damage, and subsequent aftershocks, the site wasn’t completely abandoned. Other staffers were moved to a design space in another building on the same site, filling the location with about 500 engineers — three times the usual capacity.

Thanks to these efforts, the car maker was able to restart R&D operations at the facility earlier than expected – reopening two weeks after the quake hit, Mr. Ito said. “I thought development operations could have been stalled for a few months, though I wanted to avoid that long (of a suspension). I was really encouraged that we could restart just in a few weeks,” he said.

“This is a place where all Honda’s brains are gathered. There is no way to shut this place. We’ll definitely re-establish here,” the CEO said.

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Auto Leasing Back To Highest Rate Since ’05

Vehicle leasing, a popular financing option that dried up with credit during the recession, is rebounding, another sign of an improving economy and a recovering automotive industry.

That’s good news for consumers attracted to leasing because it sometimes offers lower monthly payments plus a new car every couple of years. Automakers and dealers like leasing because it drives sales and keeps customers coming back to showrooms, reported The Detroit News.

“It really has stormed back,” said John Sternal, vice president of Leasetrader.com, an online lease tracking firm, noting that automakers are advertising lease deals with monthly payments for under $199. “Just 14-16 months ago, that was unheard of.”

The trend reflects improving economic conditions, with credit markets loosening and banks lending more freely at historically low interest rates. At the same time, used car values are strong, giving lenders confidence there will be a sound return at resale.

With automakers touting low monthly payments and eye-catching offers — including cash back and no money down at signing — customers are flocking back to dealer showrooms to lease cars and trucks.

But analysts warn that leasing poses risks for automakers. Because leased cars are resold every few years, too many deals at one time can flood the market with used cars, hurting resale values.

Leases accounted for an estimated 21 percent of new car sales in March. That followed a strong February, when leasing represented about one-quarter of all car and truck sales, the highest monthly lease rate since November 2005, according to Santa Monica, Calif.-based auto research firm, Edmunds.com.

Leading the comeback are Japanese automakers such as Honda Motor Co. and Nissan Motor Co., which are using lease deals to clear out old inventory and make room for new stock, analysts say.

In March, roughly one-third of Honda’s U.S. sales were leases; for Nissan, leases accounted for 29.1 percent of sales, according to Edmunds.com.

Among Detroit’s Big Three, General Motors Co. has been the most aggressive about promoting leasing this year. Leasing represented 14.2 percent of GM’s March sales, down from 28.4 percent in February as the automaker ended some incentives, according to Edmunds.com.

GM continues to target consumers for leases, even offering deals on its entire Buick lineup. The automaker’s momentum is fueled in part by its purchase last year of what is now known as GM Financial, which provides financing for moderate-risk borrowers.

Leases represented 16.9 percent of March sales for crosstown rival Ford Motor Co., according to Edmunds.com. That’s up from 13.4 percent for the same month a year ago. Ford dealers are promoting lease deals on the Ford Fiesta and Fusion.

Chrysler Group LLC’s leasing volume accounted for 15 percent of sales in March, up from 10.9 percent in the same month a year ago, Edmunds.com said. The Auburn Hills automaker is offering a slew of deals, including on its popular Jeep Grand Cherokee.

Industry experts say leasing volumes of about 25 percent of industry sales are considered healthy, but automakers must not slip back into an old bad habit: using irresistibly low lease rates to inflate sales numbers.

“The leasing dropped to such a small level for so long, it’s like a whipsaw effect” now, said Karl Bauer, an auto industry analyst, formerly with research firm Edmunds.com. “It’s only a good thing if the market is naturally supporting this.”

Several years ago, American automakers glutted the market with attractive lease deals, only to find that leased vehicles were worth far less than expected when consumers turned them in.

The financial meltdown made matters worse. Credit markets seized up in late 2008, causing auto sales to plummet and wreaking havoc on automakers and lenders.

GM and Chrysler stopped leasing in the fall of 2008 when their lending arms — GMAC Financial Services and Chrysler Financial — shut down as the automakers hurtled toward bankruptcy. Other financial institutions also pulled back on auto loans as they struggled to stay afloat. Suddenly, consumers had one less option for getting a new car.

In 2009, leasing fell to 13.1 percent of U.S. auto sales, down from 19.1 percent in 2007, according to Southfield-based R.L. Polk Co., an auto research firm. Last year, leasing volumes rebounded to 18.9 percent of industry sales.

Some lease deals now, however, are giving analysts pause.

GM has been offering aggressive lease deals on its all-new 2011 Chevrolet Cruze, which went on sale in the fall, said former Edmunds.com analyst Bauer. Typically, automakers reserve leasing for luxury cars and aging models, not vehicles that just arrived in showrooms.

“That’s where you get a little worried they’re trying to move iron and buy market share,” Bauer said.

GM officials contend they’re merely bringing leasing back to healthy levels — between 15 percent and 20 percent of sales — and say they’re being cautious about promotions.

The automaker was heavy on lease deals in January and February, but spokesman Tom Henderson noted that leases as a percentage of sales fell last month.

GM dealers say leasing promotions are helping drive sales.

“Three years ago, (leasing) was 70 to 75 percent of our business,” said George Fowler, general manager for Superior Buick GMC Trucks in Dearborn. That business took a nosedive during the recession.

“It has come back like gangbusters,” Fowler said, with leasing now accounting for more than half the dealership’s sales.

Casey Cabana, a sales manager at Mark Chevrolet in Wayne, said his dealership is flourishing because of leasing. Its website prominently advertises the latest “Malibu Blowout Sale!” — $192 a month and nothing down.

“It’s definitely driving showroom traffic,” Cabana said.

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Toyota’s Lexus Trails Mercedes-Benz In U.S. Luxury Race For A Third Month

Daimler AG’s Mercedes-Benz outsold Toyota Motor Corp.’s Lexus in the U.S. in March, marking three straight months the Japanese brand has failed to come out on top after winning the annual luxury race for 11 years.

Mercedes U.S. deliveries, boosted by sales of its E-Class and C-Class sedans, rose 9.4 percent to 21,484 compared to the same month last year, the Stuttgart, Germany-based automaker said today in a statement. Lexus sales rose 2.3 percent to 20,682 from a year ago while Bayerische Motoren Werke AG’s namesake brand reported a 12 percent gain to 20,295, reported Bloomberg.

March’s results combined with January and February make Mercedes the leader for the year so far by 729 sales over BMW and 5,990 over Lexus. Mercedes in the first quarter sold 53,346 vehicles. BMW, which is based in Munich, sold 52,617 and Lexus 47,356.

The results exclude Daimler’s Sprinter vans and Smart cars and BMW’s Mini brand, which aren’t luxury vehicles.

The ongoing disruption on factory operations in Japan following last month’s earthquake mean the Lexus brand may not be able to retain its rank as the top-selling U.S. luxury brand, Mark Templin, head of U.S. Lexus sales, said today.

“That may not happen as a result of production issues in Japan,” he said in a conference call.

He declined to say whether he expected competitors such as BMW and Mercedes-Benz to capitalize on the Lexus inventory situation. “You’ll have to ask them,” Templin said.

All Lexus models, except for RX sport-utility vehicles are produced only in Japan. Templin said he’s getting daily updates on what to expect in terms of inventory, without elaborating.

While Lexus has been the annual luxury leader in the U.S. since 2000, the Toyota City, Japan-based automaker’s lead over BMW shrank to 9,216 in 2010 as the Japanese automaker felt the effects of record recalls last year.

Even before the earthquake, the brand had been hurt by a lack of new vehicles while the German automakers have been helped by aggressive leasing deals, said Jesse Toprak, an industry analyst with TrueCar.com, a website that tracks auto sales.

“I don’t know if they care as much this year,” he said. Toyota’s focus this year is “to make sure their supply-chain issues – due to what’s happening in Japan – do not cost them more than what it may have already.”

The situation might also help domestic brands, such as General Motors Co.’s Cadillac, he said.

“By all means, whether it’s Mercedes or BMW or us, is that an opportunity? Sure it is,” Kurt McNeil, Cadillac’s vice president of sales, said in a telephone interview.

Sales for GM’s Cadillac luxury division rose 4.5 percent to 12,164 last month, as CTS sales rose 36 percent aided by the new coupe version.

Mercedes, which sets its production plans 60 to 90 days in advance, has limited ability to take advantage of any Lexus shortage, Ernst Lieb, head of Mercedes’s U.S. unit, said in a telephone interview.

“We can’t flip a switch quick enough to get more production,” he said. “There might be a bit of shift in terms share in these months but it’s limited.”

Nissan Motor Co.’s Infiniti sold 11,287 vehicles, a 14 percent increase from a year earlier, said Ben Poore, head of U.S. sales for the brand.

Honda Motor Co., based in Tokyo, said in a statement that sales for its Acura brand rose 7.6 percent to 12,611 last month.

U.S. deliveries of Volkswagen AG’s Audi brand rose 14 percent to 9,818 vehicles, a record for March, the company said in an e-mail.

Porsche SE, the Stuttgart-based automaker merging with Volkswagen, sold 2,588, a 36 percent gain, the company said in a statement.

Ford Motor Co. sold 8,501 Lincoln luxury vehicles in March, a 2.2 percent decrease from a year earlier, according to a statement from the Dearborn, Michigan-based automaker.

Land Rover deliveries rose 26 percent to 3,441, while Jaguar sales slipped 11 percent to 874, Mumbai-based Tata Motors Ltd. said in an e-mailed statement.

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Honda Recalls Minivans In U.S. For Possible Power Window Problem

DETROIT – Honda Motor Co. is recalling 2,800 of its Odyssey minivans to repair potentially faulty windows.

There is a potential failure with the driver and front-passenger door power windows in the affected 2011 models in which the window may come off the track and become inoperative or drop into the door, according to the National Highway Traffic Safety Administration website, reported Reuters.

The window may shatter into the passenger cabin, so Honda is replacing those windows, NHTSA said. The recall is expected to begin on or before April 15.

No crashes or injuries have been reported related to the defect, Honda said.

Earlier this month, Honda recalled more than 33,000 2011 Odyssey minivans due to a possible windshield wiper defect.

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Japan Automakers To Resume Production Slowly

Japanese automakers plan to resume their domestic output gradually at plants halted for more than a week after a massive earthquake and tsunami.

Toyota Motor Corp. and Nissan Motor Co. plan to restart production of components for their overseas plants as early as Monday and resume vehicle production later, reported The Detroit News.

While the bulk of Japan’s auto plants were not in the northeastern region hit hardest by the 9.0-magnitude quake, the supply of auto parts has been disrupted.

That’s now affecting production at non-Japanese automakers, too. General Motors Co. has suspended truck output in Shreveport, La., and is curtailing production at two European plants because of parts shortages.

Paris-based Renault SA is reducing some production that had been scheduled at a South Korean plant because of missing parts made in Japan.

Japan’s automakers are working with their suppliers to restore the production and shipment of parts.

“As the delivery of parts will take some time to be re-established, our plants, except for the Iwaki engine plant, will be partially operational,” Nissan said today in a statement.

Five of its Japanese plants will resume production of parts for overseas plants and for repairs on Monday. They are scheduled to resume vehicle production starting on Thursday “while investory of supplies lasts,” Nissan said.

Toyota also is scheduled to resume production on Monday of parts for its overseas plants, which normally account for more than half of its global output.

Its U.S. plants have been running on two shifts, although overtime has been cancelled.

Toyota and Honda Motor Co. have not said when they will start making vehicles in Japan again. Toyota has said its domestic vehicle production is halted until at least Wednesday, and Honda’s auto output will not resume before Thursday.

In a note to Honda’s U.S. dealers asking them to postpone vehicle orders, a senior U.S.-based sales executive said it wasn’t clear how quickly production would return to normal levels.

“At this time, we have enough information concerning our suppliers to conclude that the flow of parts to our Japanese production facilities will be somewhat disrupted,” wrote John Mendel, executive vice president at American Honda.

“We cannot say with certainty when those production plants will return to their full capacity.”

Itay Michaeli, an auto analyst at Citi Investment Research & Analysis, said automakers would be able to make up short-term disruptions in production by scheduling additional shifts later in the year.

For now, the situation seems fluid, he said. “Though we have yet to see major production shutdowns in North America, conversations with automakers suggest that the situation is very much day-to-day, or at best, week-to-week,” he wrote in a research note.

Damaged facilities in the quake-ravaged region, such as Nissan’s Iwake engine plant, will take time to start up. “With aftershocks still heavily impacting the region and infrastructure reestablishment still continuing, restoration is expected to take longer than the other plants,” Nissan said.

After assessing its 110 suppliers in the affected region, Honda said around a third would not be able to resume operations for more than a week.

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Honda Recalling 33,000 Minivans Over Faulty Windshield Wipers

Honda Motor Co. is recalling 33,341 2011 Honda Odyssey minivans over windshield wiper defects.

The company said if the front windshield wiper blades become frozen to the windshield, the rod may separate from the motor, making the wipers inoperative. That can increase the risk of a crash, reported The Detroit News.

Honda received the first reports of an inoperative wiper in Canada and the United States in November. In total, Honda has received 129 warranty claims in North America — most in cold-weather areas — related to the issue.

Honda will replace the front windshield wiper. The company will start notifying customers in April.

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