Report: Honda Will Revise Sales Forecasts Up While It Revises Civic

By Ben Timmons
Honda’s not taking its recent Civic-related setbacks quietly, and it certainly isn’t giving up in the face of natural disasters, supply problems, and cheap plastics: the company is shooting to increase sales by 24 percent next year.

Automotive News reports that Tetsuo Iwamura, the President and CEO of American Honda, is predicting a 24 percent increase next year in sales, as the company works to upgrade and fix its 2012 Civic coupe and sedan. If Honda can pull off both of these ideas well, it would spell a great 2012 for a company that struggled through 2011. Its Civic sedan is down 13 percent thanks to inventory problems and quality problems, and the whole nameplate is off 5.3 percent year-to-date.

Keep in mind, also, that Honda was one of the hardest-hit Japanese automakers in last March’s Great East Japan Earthquake, and it continued to suffer during the Thai floods later this year. Sales of Honda’s hybrids, which are either produced in Japan or rely on Japanese parts, were down 53 percent in November 2011 from the same period in 2010.

Still, Honda hopes that its product portfolio will carry it to victory next year, as it pushes the one-two punch of natural disasters further and further in the rearview mirror. It is looking to replenish dwindling inventories of the Civic as it readies the update, and along with the all-new CR-V, sell roughly 1.25 million Hondas in 2012.

It’s a lofty goal, but we’ll see just how attainable it is in the coming months.

Source;
http://rumors.automobilemag.com/report-honda-will-revise-sales-forecasts-up-while-it-revises-civic-96285.html

Feds' crystal ball sees tough times for 2 bailed-out automakers

By Christina Rogers

DETROIT -- President Barack Obama boasts about the successful reorganization of General Motors and Chrysler, but some in his administration are using forecasts that anticipate a lackluster future for those automakers.

Projections released by the EPA and the Department of Transportation predict that by the 2025 model year, Chrysler's sales will plunge to less than half of what they were in the 2008 model year, when the Wall Street financial crisis triggered an auto industry depression and catapulted GM and Chrysler toward government-run bankruptcies.

The U.S. Treasury still owns a 32 percent stake in GM; Chrysler has repaid its government loans.

GM sales in the 2025 model year are projected to be just about what they were in 2008, while overall U.S. vehicle sales are expected to climb 25 percent to 17.3 million vehicles in the same period.

Meanwhile, Volkswagen and Hyundai are expected to more than double their U.S. sales.
These are some of the predictions tucked away in the administration's 567-page proposal to lock in tougher fuel economy rules for the U.S. auto industry.

The proposal, released in November by the EPA and Department of Transportation, seeks roughly to double today's standards by raising requirements to an average of 54.5 mpg for each automaker by the 2025 model year. The new rules received the backing of 13 automakers in July.

VW and Daimler AG have refused to endorse the proposal because it creates no new incentives for diesel cars.

Rulemaking process
The 2025 model year projections are a part of the rulemaking process and are based on forecasts obtained by the federal agencies from the Department of Energy, as well as outside forecasting firm CSM Worldwide (now a part of IHS Automotive). A custom forecast, covering the years 2017-2025, was purchased from CSM Worldwide by the agencies in December 2009.
The figures will be updated before the rules are made final, and the public will have a chance to comment on the EPA-DOT rules in January.

The long-range estimates help set a baseline for where sales in the industry are trending even before the more stringent standards are in place. The projections are compiled by the government. Typically, automakers don't release such long-term forecasts publicly.
Chrysler, GM and Ford declined to comment on the 2025 projections.

In a statement, the National Highway Traffic Safety Administration, the arm of DOT that prepared the analysis, said: "The agencies' projections are based on the best information available to the agencies at the time. Such forecasts are always subject to change as the industry and economy shifts."

NHTSA declined to comment further.
The EPA also said in a separate statement: "The data were from DOE and CSM, a respected independent research firm. When EPA and NHTSA finalize the rule, we will update it with the more current data that becomes available."

The projections offer a glimpse into how U.S. regulators view the sales landscape in the coming years. The forecasts predict U.S. vehicle sales will hit 17.3 million for the 2025 model year -- up from 13.9 million in 2008 -- with major carmakers like Honda, Toyota, Kia and Nissan posting healthy double-digit sales increases.

Chrysler, now owned by Italian carmaker Fiat S.p.A., is the only major automaker expected to lose business during this time frame. Its sales are expected to plummet 54 percent from 1.7 million in the 2008 model year, to 768,241 in model year 2025.

That's a big departure from Chrysler's own publicly announced projections: U.S. sales of 2 million in 2014, up from 950,000 in 2009.

GM's sales will rise 3 percent to 3.2 million between model years 2008 and 2025, while Ford is expected to increase sales by 26 percent to 2.2 million in the same period, according to projections cited by the agencies.

Tesla, which sold 800 electric cars during the 2008 model year, is expected to sell 31,974 in 2025.

Dubious forecast?
Jeff Schuster, senior vice president of forecasting at LMC Automotive, said the government's figures for each automaker are a bit dated, especially given all the changes in the industry over the last few years.

Chrysler, which historically has had a truck-heavy lineup, is starting to add small car options that will help sustain sales even if gasoline prices rise.

Other automakers also will adjust their lineups in response to advances in fuel-saving technologies and shifts in consumer demand, making it tricky to forecast sales so many years in advance.

"When you get that far out, as a forecaster it becomes a crapshoot," Schuster said. "They don't even know what their lineup is going to be in 2025, so it's difficult for a forecaster to know."
Feds' projections for auto sales

The EPA and Department of Transportation include future sales projections for each automaker in the agencies' proposal for tougher 2017-2025 fuel economy standards released in November. The annual sales estimates are based on data provided by the Department of Energy and outside forecasting firm, CSM Worldwide.

Source;

http://www.autonews.com/apps/pbcs.dll/article?AID=/20111222/OEM11/111229956/1424

Honda: Operating profit forecast not conservative

TOKYO: Honda Motor Co's annual operating profit forecast is not conservative given yen strength and rising raw materials prices, the automaker's chief financial officer said on Tuesday.

"I don't think assuming 80 yen to the dollar is conservative at all," Fumihiko Ike told a small group of reporters. "The same goes for raw material prices," he said.

Japan's No.3 automaker this month forecast a worse-than-expected 65 per cent fall in annual operating profit to 200 billion yen ($2.49 billion) for the year to March 2012 and projected a 6 per cent drop in global car sales to 3.3 million vehicles.

Many analysts consider its guidance overly conservative.

Source;
http://economictimes.indiatimes.com/news/international-business/honda-operating-profit-forecast-not-conservative/articleshow/9021763.cms

Honda’s Ito Defends Efficiency Lead as Hyundai Gains

By Makiko Kitamura and Alan Ohnsman
June 23 (Bloomberg) -- Takanobu Ito became a star at Honda Motor Co. with his work on the NSX sports car, the company’s most powerful model. Now, as chief executive officer, he’s focusing on fuel efficiency as Ford Motor Co. and Hyundai Motor Co. threaten Honda’s leading position in North America.

While Honda’s fleet is rated the most fuel-efficient in the U.S., Ford’s Fiesta subcompact gets up to 33 miles per gallon in combined city/highway driving, compared with 31 mpg for Honda’s rival Fit hatchback. Hyundai’s Sonata sedan tops Honda’s top- selling Accord in economy and horsepower, and its revamped Elantra compact promises to use less fuel than Honda’s Civic.

“Ford is coming back, and Hyundai is gaining market share,” said Tadashi Usui, an analyst at Moody’s K.K. in Tokyo. “The gap between Japanese automakers and rivals is shrinking.”

Honda, after axing its V-10 NSX supercar project in 2008, is redoubling efforts to boost fuel efficiency to fend off growing competition. Ito delayed the release of a revamped Civic compact after telling engineers he was unhappy with its size and fuel economy, said Tomohiko Kawanabe, president of Honda’s research and development unit.

Even as factors including pricing and design shape research efforts, “fuel efficiency has become the first priority in our discussions,” Kawanabe said in an interview at Honda’s research center last month in Wako, west of Tokyo.

Risking Reputation
Honda’s U.S. sales gained 13 percent in the first five months of 2010, trailing industry growth of 17 percent. Ford’s rose 31 percent in the same period, while Hyundai’s sales grew 23 percent.

Japan’s second-largest carmaker has focused on only mild improvements in fuel economy recently, risking its “green” reputation, said Ed Kim, an industry analyst at AutoPacific Inc. in Tustin, California. For example, Honda uses 5-speed automatic transmissions as the industry adopted more efficient 6-speeds, and seems reluctant to use direct-injection and turbocharging technology, Kim said.

“Even before the green thing was big, they were into green,” said Kim, a former Hyundai product planner. “Over the last few years, they’ve been completely leapfrogged in new engine technologies.”

Honda’s U.S. fleet of Honda and Acura 2009 models averaged 23.6 mpg in the U.S. Environmental Protection Agency’s fuel efficiency assessment, adjusted for real-world driving.

Hyundai- Kia group vehicles were second in the 2009 model-year survey, averaging 23.4 mpg.

Hyundai models alone, excluding those of Kia Motors Corp., exceeded Honda’s fleet with an adjusted average of 23.9 mpg, according to EPA.

Depositary Shares
Toyota Motor Corp. had an adjusted fleet average of 23.2 mpg, and Ford, with a 20.5 mpg fleet, ranked seventh.

Honda’s American depositary receipts, each representing one ordinary share, fell 9 cents to $29.90 at 4:15 p.m. in New York Stock Exchange composite trading, have dropped 12 percent this year. The shares fell 1.5 percent to close at 2,720 yen in Tokyo.

Another motivation for Honda to raise vehicle efficiency is a U.S. regulation forcing an industrywide increase by model year 2016. Honda’s fleet must average 37.4 mpg by that time, a 50 percent improvement from about 26 mpg now, John Mendel, head of Honda’s U.S. sales operation, said June 8.

The global recession following the collapse of Lehman Brothers Holdings Inc. in September 2008 also spurred Honda’s strategic shift, said Ito, who became CEO a year ago.

“In a certain sense, Lehman was a blessing,” Ito said in Tokyo last month
.
Unlike before the recession, price increases are tough to justify and vehicle size and fuel economy need to “conform to these times,” Kawanabe said.

Prius Competition
Expanding Honda’s line of hybrid cars is part of the strategy. Honda plans to introduce a new hybrid Civic with a lithium-ion battery that can store twice the power of a nickel- metal hydride battery, Kawanabe said. The company will unveil a new hybrid version of the Fit later this year.

Honda’s Insight and Civic hybrids haven’t gained ground on Toyota’s Prius, the world’s top-selling hybrid. The Prius outsold the Insight 6-to-1 in the U.S. this year through May.

One reason may be fuel economy. Toyota’s hybrid gets 51 mpg in city driving, while the Insight gets 40 mpg. Honda Executive Vice President Koichi Kondo also said the Insight, a compact model in the U.S. compared with the midsize Prius, may be too small for Americans.

The company is also exploring stop-start technology, turbochargers and expanding continuously variable transmissions to boost fuel efficiency, said Hiroshi Ataka, a Tokyo-based analyst at consulting company IHS Global Insight.

Favoring Hydrogen Power
While Honda is researching electric cars, it’s less optimistic about demand for them than Nissan is and favors hydrogen-powered cars as the ultimate zero-emission vehicle.

Honda set up a lithium-ion battery venture with GS Yuasa Corp. and can shift gears quickly if necessary, Ataka said.

The company stopped producing the NSX supercar, its fastest production model, in 2005. It planned to reintroduce it this year. Instead, it built the low-priced, sporty CR-Z hybrid that arrives in the U.S. in August.

As a young engineer Ito consulted bullet-train designers to develop an all-aluminum body for the first-generation NSX when superiors considered the notion impossible, according to a company publication.

“I love sports cars,” Ito said at the Beijing Motor Show in April. “But we have to watch the economic situation and our purse strings.”

Source;
http://www.businessweek.com/news/2010-06-23/honda-s-ito-defends-efficiency-lead-as-hyundai-gains.html

Ford, Honda expected to lead industry in market-share gains

According to closely watched industry report, Ford and Honda are expected to lead the industry in market-share gains over the next four years, while GM and Chrysler hold steady, and slip, respectively. Ford and Honda are expected to each gain 2 points of market share by 2013 courtesy of redesigned cars and trucks being introduced ahead of industry pace.

“Ford’s recent gains should continue, with share reaching the 17% to 18% range, supported by a solid product cadence,” automotive analyst John Murphy said in the report.

While admitting that staying ahead in the automotive game is getting harder, Murphy said that rolling out redesigned vehicles faster than competitors is a sure way to boost sales and keep factories busy, thus posting big profits. Replacement has held steady at about 13% since 1992, but is expected to spike to 27% this year, with Chrysler replacing at a rate of about 24%. “Chrysler products are likely to have a tough time in a competitive market,,” Murphy said.

Source;
http://www.egmcartech.com/2010/06/02/ford-honda-expected-to-lead-industry-in-market-share-gains/