Showing posts with label Honda US Production. Show all posts
Showing posts with label Honda US Production. Show all posts

'Transplant' auto factories in USA turn 30 this year

By James R. Healey, USA TODAY


When Honda Motor in 1980 announced its then-radical decision to build cars in the U.S., the industry collectively said, "What?"


Volkswagen, alone among foreign car companies, was trying limited U.S. production, assembling Rabbit compacts at a Pennsylvania factory, and struggling to get it right.


While auto buyers now take for granted that many European- or Asian-brand vehicles are made in the heart of the U.S., 30 years ago, it was a stunning notion.

STORY: Auto exports from U.S. on the upswing


Japan's Honda was "the canary in the coal mine," says John Voorhorst, a consultant and retired executive of auto-parts supplier Denso. "There were a lot of skeptics" betting Honda's plant at Marysville, Ohio, wouldn't last.

In fact, that "transplant" factory, which built its first Accord in November 1982, burst a dam. Within a few years, Japan's major automakers all were here cranking out new vehicles.


At the New York International Auto Show, opening to the public Friday, Honda will display new versions of the Accord, and Nissan will unveil a redesigned Altima — both made in the U.S. and among its best-selling cars. Toyota will show a successor for Avalon, its U.S.-made big sedan based on the U.S.-made Camry.


"Once (Honda) had the trial by fire and came through, clearly, it emboldened others. It was the opening of the floodgates," Voorhorst says. Foreign companies "saw that you could come here and not have to have a Volkswagen-esque experience."


In the three decades since, Japanese carmakers have opened more assembly and parts factories here, joined by Europeans and South Koreans.


The industrial immigrants haven't been welcomed by all.


A decade ago, about 51% of vehicle and parts manufacturing jobs were clustered in Michigan, Ohio and Indiana, traditional turf of the Detroit Three. Workers were mostly represented by the United Auto Workers.


Now, there are fewer than half as many total automaking jobs as a decade ago, and Michigan, Ohio and Indiana have just 44% of those left, according to data from the Center for Automotive Research. Many of the jobs now are in foreign-owned, non-union transplant facilities, mainly in the South.


About the time Honda opened its pioneering plant, General Motors, Ford Motor and Chrysler Group accounted for three-quarters of new vehicles sold in the U.S. That's about 47% now.
Foreign automakers with U.S. factories, in comparison, have about 48% of all new vehicle sales here, according to industry tracker Autodata.


While the foreign-brand sales include both imported and U.S.-built vehicles, the robust market share has encouraged the companies to build cars here.


Today, 10 foreign-based car companies operate 16 big assembly plants in the U.S. and others in Canada and Mexico, building for North America and for export. They also now make engines, transmissions and other key components in the U.S.


Despite that now-proven success, it would have been easy to bet against Honda 30 years ago:

•VW's converted Chrysler factory at Westmoreland County, Pa., was stumbling toward failure. It closed in 1988.


•U.S. buyers' love affair with import brands hadn't bloomed.


•Whether U.S. workers could build foreign-designed cars to the same quality standards and could work for foreign bosses still were question marks. "There was suspicion about the quality of the American workforce" and its ability to perform under Japanese management techniques, recalls David Cole, chairman emeritus of the Center for Automotive Research at the University of Michigan.


Once the American-made Accords arrived at dealerships, for example, some shoppers looked at vehicle identification numbers, insisting on a VIN beginning with the "J" that meant the car was made in Japan.


"In those early days, some people wanted Japan-built Accords, but that lasted about two seconds," says Kurt Antonius, recently retired after 28 years running Honda's U.S. public relations office. He was at GM when Honda opened its plant.


He believes that bias against Ohio Accords was undercut when auto magazines "bought both and did comparisons. They were identical."


Cole says Honda's move into U.S. production also broke Japanese automakers' insular tendencies — which he says was more significant overall than building cars here.


"Historically, the Japanese tend to be very inward-thinking. Coming here was a huge, huge step. It was a cultural chasm of immense dimension," Cole says. Honda "broke that barrier."

Next up, Nissan


In June 1983, less than a year after Honda began making Accords at Marysville, Nissan Motor opened a factory in Smyrna, Tenn. That plant now can build more than half-a-million vehicles a year and makes Altima sedans, Frontier pickups and Pathfinder SUVs.


In 1986, Toyota Motor began production at Georgetown, Ky., where it builds Camry and Avalon sedans. It can make 500,000 vehicles a year.


Toyota, Nissan and Honda have built more U.S. plants since then. Japan's Subaru and Mitsubishi have joined them. German luxury brands BMW and Mercedes-Benz also now have U.S. factories. South Korea's Hyundai and Kia have U.S. plants.


And now, again, so does VW.

Despite corporate anguish and embarrassment about the Westmoreland failure, last year, it opened a plant at Chattanooga, Tenn., that makes its redesigned Passat.


"The decision in the Volkswagen Group to build a factory in the U.S. was difficult, due to what happened at Westmoreland," said Christian Klingler, member of the VW Group board in charge of worldwide sales.


He and VW Group global CEO Martin Winterkorn discussed Westmoreland and Chattanooga during a visit to Detroit earlier this year. Klingler said it took years to get over the fear that U.S. workers "wouldn't be able to hold quality." Winterkorn said VW's mistake was trying to build an Americanized car at Westmoreland when "the American customer wanted a German" car.


Though Honda is a big player in the U.S., it's a relative pipsqueak globally compared with Toyota and Nissan.


What's the motivation?


Why, then, did Honda have the guts to build a U.S. factory?


There was then, as now, a big currency exchange risk in dollar-denominated markets. That threatened all foreign automakers. "It became clear that the only way you could isolate from the problem was to build where you sell," Cole notes.


But Honda moved first, he says, because it was scrappier, evolving from a motorcycle and small-engine maker into a full-fledged car company over the objections of its home government. It also had a toe in the water, building motorcycles in Marysville since 1979.


Says Cole, who's spent a career digging into what motivates Japanese and other carmakers: "Honda sees itself as the dirty-fingernail motorcycle-mechanic kind of operation, more entrepreneurial than the others."


Source;

Honda Gives Assurances to U.S. Dealers

By MIKE RAMSEY
DETROIT—Honda Motor Co. told its U.S. dealers Friday that July vehicle deliveries would increase by 11% from June levels and accelerate in August as the auto maker ramps up production after the March 11 earthquake in Japan.

American Honda Executive Vice President John Mendel said in a memo that its sales continued to "run at a relatively soft pace" despite what the company considers decent inventory levels, albeit lower than year-earlier levels.

"Many of you have indicated that it is due in large part to concerns for inventory going forward," Mr. Mendel said.

Honda follows Nissan Motor Co. in efforts to encourage its dealers to continue driving deals to gain customers despite a murky outlook for vehicle inventories this summer. Both auto makers and Toyota Motor Corp. had to stop production in Japan for several weeks following the earthquake, and all continue to face shortages of electronic components, LCD screens and rubber.

U.S. sales for Honda rose 10% last month compared to 18% for the overall industry.

"It's interesting to note that although our total inventory is down versus May 2010, we have more CR-Vs, Pilots and Fits in dealer inventory now than we did a year ago," Mr. Mendel said.

"With this level of inventory, coupled with competitive incentives focused on vehicles with sufficient availability, you all need to continue to push hard on the sales front."

Last week, Nissan asked dealers to be more aggressive and go after Toyota and Honda, which it deemed vulnerable.

Source;
http://online.wsj.com/article/SB10001424052748704816604576335061787279604.html?mod=googlenews_wsj

Honda Builds More Cars Here Than There - News

Puts a new spin on buying domestic....What’s more, Camry and Accord are the most American of all.

In the second quarter of this year, Honda built 236,819 cars in the U.S., a dry bit of data until you realize that in the same time frame it built 236,559 cars back in Japan. It’s a tiny edge. It may not last for the whole year. But it’s the first time that Honda produced more cars here in the U.S. than at home.

The background is also compelling: Japan’s home market continues to shrink, while U.S. sales appear to have bottomed out and are experiencing a slow uptick. According to the Japan Automobile Manufacturers Assoc., which keeps tab of such things, its members now operate 31 U.S. manufacturing plants and have 34 major R&D facilities here.

Automakers are truly international businesses; all of them. For example, a Toyota and a Honda built here beat out the likes of Ford, GM and Chrysler in terms of domestic content. Top of the list compiled by Cars.com is the Toyota Camry built in Georgetown, Kentucky, and Lafayette, Indiana. Second is the Honda Accord, among those 236,819 cited above, built in Marysville, Ohio, and Lincoln, Alabama. First “domestic” nameplates are the Ford Escape and Focus in third and fourth place, then the Chevrolet Malibu and, further down the list, the Dodge Ram 1500 truck.
Domestic parts content information is posted along side the window sticker of all new cars; this, as part of the American Automobile Labeling Act of 1994. Identified is the percentage, by cost, of parts originating in the U.S. and Canada.

Source;
http://www.roadandtrack.com/auto-news/honda-builds-more-cars-here-than-there

A first: Honda's U.S. output tops Japan's


For the first time in its history, Honda Motor Co. built more vehicles in the United States during the April-June quarter than it did in Japan.

Honda, the first Japanese company to build a car factory in the United States, said its U.S. output totaled 236,819 vehicles in its fiscal first quarter. It produced 236,559 vehicles in Japan in the same period, according to a quarterly production report.

Spokesman David Iida confirmed today that it was the first time that Honda's U.S. vehicle output had exceeded Japan's during a full quarter.


For the first six months of 2010, Honda's Japanese output of 491,024 vehicles surpassed the U.S. total of 480,913 vehicles.

Company officials said Honda has steadily increased its local output, not just in the U.S. but in other regions.

The proportion of Honda vehicles sold in the U.S. that are produced in North America reached 90 percent in the first six months of 2010, Iida said.

In all of North America, Honda's output totaled 322,260 vehicles in the first quarter of the fiscal year begun April 1.

"In the long term, there are more growth opportunities in the United States than there are in Japan," said analyst Jesse Toprak at TrueCar.com in Santa Monica, Calif.

"There's not much growth in Japan, where there's a population decline. In the United States, sales can only get better."

But the fastest growth will occur in emerging markets, he said.

Benefiting from robust sales in the U.S. and Asia, Honda reported strong first-quarter earnings last week. The Tokyo-based automaker reported a steep rise in net profit, to 272.4 billion yen, or $3.2 billion, from 7.5 billion yen, or $81 million, a year ago. It also increased its earnings forecast for the year.

Japan's automakers are profiting from rebounding demand across Asia and in Japan. Honda, the world's leading motorcycle manufacturer, also is benefitting from brisk motorcycle sales in emerging markets.

Honda initially produced motorcycles in the U.S. after building a plant in Marysville, Ohio, in 1979. It began auto production in Ohio three years later.

Source;
http://detnews.com/article/20100803/AUTO01/8030422/1148/rss25#ixzz0vbU8u3eQ

Honda Builds Record 84% of 2009 U.S. Auto Sales in North America

Now, that argument about buying domestic....
Highest Total Since Honda Began Producing Autos in America in 1982

An all-time high of 83.8 percent of the Honda and Acura automobiles sold in the United States in 2009 were produced* at the company's plants in North America, American Honda Motor Co., Inc., announced today. American Honda has maintained a local production rate of approximately 75 percent or higher since 1996.

Honda operates seven automobile plants in North America - four in the U.S., two in Canada and one in Mexico, producing fifteen different models, including the Civic sedan, coupe and GX (natural gas vehicle), Accord sedan, coupe and Crosstour, Odyssey, Pilot, Ridgeline, CR-V and Element, as well as the Acura TL, ZDX, RDX and MDX models.

Honda's North American plants produced a total of more than one million vehicles in 2009, including those for export and currently in dealer inventory. Of the more than 1.15 million Honda and Acura automobiles sold in the U.S. in 2009, the 83.8 percent local production rate is the highest percentage in the company's 27-year history of making automobiles in the region and by far the highest percentage for any international automaker in 2009.

"As part of our long-standing commitment to build Honda and Acura products close to our customers, we have steadily deepened our automobile manufacturing roots in the U.S. and the North America region," said Tetsuo Iwamura, president & CEO of American Honda Motor Co., Inc. "Using our flexible manufacturing capacity, we plan to continue to maintain our local production levels at approximately 80 percent of our annual sales."

Honda began production of the fuel efficient Honda Civic sedan at its seventh North American auto plant, in Greensburg, Indiana, in October 2008. In 2009, the company added production of two new crossover vehicles - the Honda Accord Crosstour, manufactured in East Liberty, Ohio, and the Acura ZDX, manufactured in Alliston, Ontario - along with the addition of fuel-efficient four-cylinder engine production at a new engine plant in Ontario, Canada.

Honda has exported nearly 960,000 automobiles from its plants in North America to more than 100 countries around the world since 1987, including approximately 27,000 vehicles in 2009, as well as exporting more than 300,000 component parts last year to be used in the assembly of Honda products in other nations.In addition to automobile production, Honda operates three automobile engine plants in North America - two in the U.S. and one in Canada - along with two U.S. plants for the production of automatic transmissions and gear sets; a power equipment and small engine plant, in North Carolina; and a plant producing Honda all-terrain vehicles, in South Carolina.

Two additional new plants, for the production of the HondaJet advanced light jet and the GE Honda turbofan engine, are under construction in the communities of Greensboro and Burlington, North Carolina, respectively.

About Honda
Honda began operations in the U.S. in 1959 with the establishment of American Honda Motor Co., Inc. Honda began U.S. production of motorcycles in 1979 and automobiles in 1982. The company has invested more than $12.1 billion in its North American operations with employment of more than 25,000 associates and annual purchases of more than $17.5 billion in parts and materials from suppliers in North America.

Source;
http://www.honda.com/newsandviews/article.aspx?id=5354

Honda May Pass Chrysler in North America Production

May 12 (Bloomberg) -- Honda Motor Co., Japan’s second- biggest automaker, may build more vehicles than bankrupt Chrysler LLC in North America this year, further weakening Detroit’s grip on its home market.
Honda narrowed the gap to 17,011 vehicles at the end of April from 236,645 a year earlier, and with most Chrysler plants shut for as long as 60 days analysts expect the Japanese automaker to overtake its rival. Honda may also surpass Chrysler in U.S. sales to trail only bankruptcy-threatened General Motors Corp., Toyota Motor Corp. and Ford Motor Co.
“There’s a sea change under way,” said Michael Robinet, an analyst at forecaster CSM Worldwide in Northville, Michigan. “This crisis with Chrysler and GM has acted as an accelerant to the systemic change that was already occurring.”
Toyota passed Chrysler in U.S. sales in 2006 and then Ford in 2007, as Japanese automakers lured customers with more fuel- efficient vehicles. The big three U.S. automakers’ market share has plunged to 44.4 percent this year, from more than 70 percent a decade ago, while overall sales have slumped to the lowest volume in about three decades.
Honda, fifth in the U.S. since 1988, has outsold Chrysler this year as of April. Its sales in the country slid 32 percent to 332,014, compared with a 46 percent drop for Auburn Hills, Michigan-based Chrysler to 323,890. Overall U.S. sales are down 37 percent through the first four months of the year.
Chrysler Plunge
“Market share isn’t something we target,” said David Iida, a spokesman for Honda’s U.S. unit, based in Torrance, California. “We’re very committed to local production, irrespective of what other companies are doing.”
The automaker fell 1.4 percent to 2,860 yen at the close of Tokyo trading. The stock has risen 50 percent this year.
Industrywide North American car and light-truck production plunged 49 percent through April, with Chrysler leading declines among major manufacturers, according to Haig Stoddard, an IHS Global Insight analyst. Chrysler’s production in the period fell 57 percent to 322,773, based on company figures.
Honda built 305,762 autos at assembly plants in the U.S., Canada and Mexico through last month, down 40 percent from a year ago. The maker of Civic and Accord cars has U.S. plants in states including Ohio, Indiana and Alabama.
Chrysler, hoping to emerge from bankruptcy within 60 days as a new company led by Fiat SpA, halted work at most plants on May 4 while it reorganizes. The company also said it’s closing six factories that won’t be part of the Chrysler-Fiat deal.
Foreign Production Gains
“Honda and Toyota are both likely to outbuild Chrysler,” said John Sousanis, director of industry data for Ward’s Automotive Group. “We have each of them making 1 million vehicles or a bit more in North America this year, and Chrysler building just under 1 million -- and that’s before Chrysler announced its plan to shut down plants.”
Next year, Japanese, German and South Korean automakers will likely build more than half of the vehicles assembled in the U.S., outstripping local manufacturers for the first time, said CSM’s Robinet.
By 2011, Asian and European automakers will have more overall auto-assembly capacity in North America than U.S. competitors, said economist Kim Hill, with the Center for Automotive Research in Ann Arbor, Michigan.
“The market has matured,” said Hill. It “is moving away from the traditional Big 3 model to one that’s much more international.”
To contact the reporters on this story: Alan Ohnsman in Los Angeles aohnsman@bloomberg.net Last Updated: May 12, 2009 06:40 EDT

Source;
http://www.bloomberg.com/apps/news?pid=20601080&sid=aDXqt5HGPyMY&refer=asia#