Tag Archive | "Takanobu Ito"

Honda’s Ito Forecasts Business Results to Be Best in at Least Five Years

Honda Motor Co. President Takanobu Ito forecast that business results at Japan’s third-biggest carmaker will climb to the highest in at least five years, led by sales of Accord sedans and Civic compacts in North America.

Business results in the year ending March 2013 will recover to levels achieved before the failure of Lehman Brothers Holdings Inc. roiled global markets, as sales climb above 4 million vehicles for the first time, Ito said in an interview this week. Lehman filed for bankruptcy in September 2008, six months after Honda earned record annual profits, according to Bloomberg.

“It will be the year of the complete rebound,” Ito said at the company’s Tokyo headquarters. “Sales in North America will lead the recovery. We’ll introduce a fully revamped Accord in the fall, and that will be a big plus to our sales.”

Ito’s comments reflect a revival in confidence by Japanese automakers as they recover from a year plagued by natural disasters at home and in Thailand. Toyota Motor Corp., Asia’s largest carmaker, said this week annual sales will be 100,000 units higher than it anticipated last month.

“Honda’s targets are definitely aggressive, but the U.S. economy seems like it’s going to recover to a better-than- expected level this year so it’s likely for them to achieve it,” said Mitsushige Akino, who oversees $600 million at Ichiyoshi Investment Management Co. in Tokyo. “They’ve remodeled their best-selling cars, and we can expect strong sales in North America to help them regain market share.”

Honda fell 1.9 percent to close at 2,689 yen in Tokyo. It’s gained 15 percent this year, the best performer among Japan’s three biggest automakers. That’s a reversal from 2011, when the stock’s 27 percent drop made it the worst performer.

Honda’s operating income, or sales minus the cost of goods sold and administrative expenses, will probably double to 586.6 billion yen ($7.6 billion) next fiscal year after shrinking 52 percent, according to the average of 24 analyst estimates compiled by Bloomberg. Earnings reached 953.1 billion yen, 851.9 billion yen and 868.9 billion yen, respectively, in the years before Lehman’s bankruptcy.

Ito, 58, is counting on the U.S. market to drive growth.

The redesigned Accord sedan, the Civic and CR-V sport- utility vehicle will help Honda increase U.S. sales 24 percent to 1.43 million units in 2012, Ito said. Sales in the market, Honda’s largest, declined 6.8 percent last year, led by a 17 percent drop in deliveries of the Accord. The Accord is Honda’s best-selling U.S. model, followed by the Civic.

Ito ruled out any major overhaul of the Civic after the current version of the sedan, which failed to receive the “recommended” status its predecessors had from Consumer Reports magazine, was the best-selling model in the compact-car segment in the last three months of the year.

Honda’s new models will give it an edge in the U.S. over South Korea’s Hyundai Motor Co., which is producing close to full-capacity, said Kota Yuzawa, a Tokyo-based analyst at Goldman Sachs Group Inc. That puts Honda in “good position” to regain lost market share, he said.

Honda may not be alone. Japan’s three biggest carmakers are poised to gain market share this year at the expense of U.S. producers led by General Motors Co. and Ford Motor Co., according to five analysts surveyed by Bloomberg.

In China, the world’s largest auto market, Honda expects its sales to rise more than 20 percent to 750,000 units in 2012 after they shrank for the first time in 2011 in a slowing market, Ito said. The company plans to introduce three gas- electric hybrid models in the country this year, he said.

“China is still strong,” Ito said. “Once motorization captures a market, it’s unstoppable.”

China’s total vehicle sales — including cars, trucks and buses — grew 2.5 percent to 18.5 million units last year, according to the China Association of Automobile Manufacturers, trailing growth in the U.S. for the first time in at least 14 years. Honda expects the market to expand to 20 million this year, or “just above” China’s economic growth, he said.

In Thailand, where the country’s worst floods in almost 70 years disrupted assembly plants and supply of components in 2011, Honda plans to resume production starting in April, Ito said. Damages stemming from Thailand forced the company to scrap this fiscal year’s profit forecast.

As part of Honda’s strategy of producing cars where they are sold, the company plans to reorganize its Japanese factories so they focus on production of minicars, a growing category that makes up about 40 percent of the nation’s auto demand, Ito said. Orders for the N Box minicar in Japan reached 27,000 units in its first month of sales, more than double Honda’s original target.

Minicars, defined as vehicles no longer than 3.4 meters (11 feet) in length, will account for 40 percent of Honda’s Japan sales, compared with 25 percent now, Ito said.

Honda joins Toyota and Nissan in reorganizing operations as the yen, which has gained against the world’s 16 most-traded currencies for two straight years, erodes the value of exports. Honda plans to boost the portion of vehicles sold in the same region they’re built to as high as 80 percent, Ito said. In 2010, Honda sold about two out of three Japan-built cars in the country.

Officials at Toyota and Nissan this month have also echoed plans to increase their portion of vehicles sold in the region where they’re assembled.

“Minicars will be key for us in Japan in the next five years,” Ito said.

Posted in Auto Industry NewsComments (0)

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.

Posted in Auto Industry NewsComments (0)