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Showing posts with label Auto Market News. Show all posts
Showing posts with label Auto Market News. Show all posts
Business Week; Can Honda Keep Defying Gravity?
Yes, that is a Honda Accord upside down, 'defying gravity', it's the best I could find....So far Japan's No. 2 is weathering the slump in auto sales better than most other automakers, including rivals Toyota and Nissan
In the auto industry, sometimes it pays to avoid the recent fashion. In the late 1990s, when the mantra of auto consultants was that all but the biggest car companies must merge or die, Honda (HMC) remained fiercely independent and flourished. Alliances, including the ill-fated coming together of Daimler (DAI), Chrysler, and Mitsubishi Motors, in most cases didn't pay off.
More recently, Honda largely sidestepped the stampede to sell Americans bigger and heavier SUVs and pickups. That has held the Tokyo-based company in good stead, as sales of gas guzzlers have collapsed and helped Honda do better than most this year. While that's not saying a lot, Honda's U.S. auto sales through November are down 5.4% to 1.34 million vehicles. That's not good, but it's better than the U.S. Big Three, which have seen sales decline by more than 20%. It's also better than Toyota (TM) and Nissan (NSANY), whose sales have slipped 13.4% and 9.4%, respectively.
Combined with growth in China and other emerging markets, that partly explains why in October Honda assembled 370,000 autos around the world, more than any month in its history. It also explains why among Japan's Big Three automakers Honda appears to be the most optimistic for the months ahead. Indeed, while Toyota and Nissan cut their annual net profit projections by 68% and 52%, respectively, at the end of the last quarter, Honda said its full-year earnings will only be 1% shy of its original target of $5.2 billion. "Honda's earnings will not remain unscathed, but we think it is very resilient in the context of the sector," says Takaki Nakanishi, an auto analyst at JPMorgan Chase (JPM) in Tokyo.
Challenges Ahead
Still, as the global economic picture has worsened, there have been signs in recent weeks that even Honda's optimism may be waning. In Japan, Honda is cutting 760 temporary jobs at four plants, including a motorcycle plant, due to falling demand in the U.S. In Britain, the company will shutter production at its Swindon plant for 50 days in early 2009 and is offering workers an undisclosed number of early retirement packages.
Meanwhile, reports in Japan say Honda will scale back investment in emerging markets. According to the Nihon Keizai newspaper, Honda will delay a plan to raise capacity at a plant in Turkey; a new plant in India, slated for 2010, will be delayed until 2011 or later. And Honda sales in the important U.S. market are now plummeting almost as quickly as rivals. After slipping 25% year-on-year in October, Honda's U.S. sales fell 31.6% last month, compared with an industry average of 36.7%. "The fact is that the market changes are coming so fast we can barely catch up," Koichi Kondo, senior managing director at Honda, told BusinessWeek in an interview at the company's Tokyo headquarters on Nov. 28, before the November figures were released. "It's going to be quite challenging for us to meet profit targets."
One problem is that emerging markets that had been compensating for slumping demand in Japan, Europe, and the U.S. are now slowing. In China (BusinessWeek.com, 11/21/08), for example, Honda is still on target to meet its annual target of selling 490,000 vehicles this year, a rise of 17%. But that growth, says Kondo, hides a recent slowdown. "We'll hit our targets, which were set at the start of the year, but since October it's been harsh," he says.
Then there's the Detroit bailout. With customers nervous about the economy and unwilling to spend on new vehicles, U.S. auto sales, with some exceptions, are now falling across the board. It's not just big SUVs and pickups. Grim news of General Motors (GM), Ford (F), and Chrysler needing a government-backed rescue hardly inspires confidence among would-be car buyers. Even worse for all automakers would be the impact of any of the Detroit carmakers going bust (BusinessWeek.com, 11/19/08). Any bankruptcy proceedings, Kondo says, would hurt suppliers, many of which are shared by domestic and transplant automakers, and the entire industry would suffer. "We want them to avoid Chapter 11 as much as possible," he says.
Yen Trouble
An added complication for Japanese automakers is the surging yen. Year-to-date the yen has risen 15% against the dollar. Against the euro it is up 25% and even more vs. many emerging-market currencies, making it harder for Japanese exporters to turn a profit on exports and reducing the value of profits made outside Japan when translated back into yen.
In Honda's favor, its levels of local production are relatively high. In North America, 78% of the vehicles it sells are built in the region, the highest ratio among Japan's Big Three. Analysts add that for the current quarter Honda has hedged much of the currency risk, which reduces its exposure to the yen's recent surge, albeit temporarily. Ultimately, a 1 yen appreciation of the Japanese currency against the dollar costs Honda about $200 million—the last thing an automaker needs at a time when global demand is slowing. "If the yen had been strengthening while volumes had been flying, there wouldn't be any great problems. It's the fact that everything is coming together all at once," says Andrew Phillips, an analyst at KBC Securities in Tokyo.
Still, for all the gloom, most analysts still maintain that Honda can do better than peers in the months ahead. Clearly, its problems are not close to those of U.S. rivals, which are trying to stare down bankruptcy. And even as sales fall in its key markets, Honda's focus on smaller cars and reputation for fuel economy and reliability should continue to aid sales during a recession. It's also telling that Honda isn't currently offering 0% financing in the U.S. to woo customers, unlike Toyota and Nissan. And yet Honda's sales are still falling less quickly.
Along with higher levels of local production, analysts also point to the effectiveness of Honda's strategy of focusing on big-selling global models. In the U.S., for instance, Honda sells 15 models in all. That's not even half the lineup of Toyota, which has 29 different models; Nissan, meanwhile, with smaller sales, offers 21. What's more, just four "global models"—the Fit, Civic, Accord, and CR-V—account for 75% of Honda's total sales, with each selling more than 500,000 a year. That means that while Honda has less buying power than larger carmakers, it can still eke out scale efficiencies. "If we really want to have efficient production, it's better to have more of these global models," Kondo says. The worry for other automakers is that if Honda struggles, it likely will be even worse for them.
Source;
http://www.businessweek.com/globalbiz/content/dec2008/gb2008123_306718.htm
Automobile's Man Of The Year: Honda's Takeo Fukui
In a year when the U.S. auto market has been knocked out cold by the one-two punch of spiking fuel prices and the financial meltdown, it's not easy finding a hero in the car business. Now that the tide of easy credit and cheap gasoline has gone out, we see that a lot of car companies have been swimming naked. But not Honda. Honda's steadfast refusal to follow the herd once looked stubborn but now appears prescient. In an era when platinum-paid executives rarely deviate from the orthodoxy of the crowd, Honda's Takeo Fukui has successfully avoided faddish trends and instead stayed true to the founding principles of Soichiro Honda and his successors. For that, Honda president and CEO Takeo Fukui is the 2009 AUTOMOBILE MAGAZINE Man of the Year.Fukui's long path to the presidency at Honda has seen him move through many of the arenas that are so key to the company's DNA: R&D, motorsports, and manufacturing. An engineer by trade-funny how so many of the best auto executives are-Fukui joined Honda in 1969 and started work on the project that would lead to the Honda CVCC (Compound Vortex Controlled Combustion) engine, a unique approach to meeting emissions regulations and an early indicator of the nascent automaker's engineering prowess and commitment to the environment.
Honda often goes its own way, whether it's being the first Japanese auto manufacturer to set up a U.S. assembly plant (a move many others followed), avoiding the merger mania that swept the industry (most of which have since been undone), or refusing to follow the herd with its model mix.
Honda kept to the sidelines when Nissan and Toyota went scurrying after the U.S. automakers in the full-size pickup, and attendant big SUV, markets-both of which are now in a free fall. Resources not spent developing trucks have been directed instead to cars, such as the Accord, enabling Honda to keep them at the top of their game.
Unlike so many other car companies, Honda has not treated the small-car arena as a low-margin backwater. Every generation of Civic moves the bar of excellence still further, and the introduction to the United States of the even-smaller Fit, in 2006, proved to be a deft move indeed. Honda blew through its 50,000-unit projected annual sales estimate for that car by some 30,000 units in 2007, and at this writing is on track to sell even more for 2008, when the model has been effectively sold out for months and a redesigned version was introduced.
Diesel engines are off the radar in Honda's home market of Japan, but Fukui and his team recognized their importance to Europe, leading Honda to develop an advanced 2.2-liter turbo-diesel four-cylinder for that market. Like so many Honda engines, it's been winning rave reviews and will come to the United States later this year in the Acura TSX.
Looking ahead to future technologies, Fukui continues to lead the company outside the mainstream. The upcoming new Insight hybrid, for instance, was engineered with an emphasis on cutting the weight and the cost of the hybrid powertrain, rather than maximizing fuel economy. The Insight is expected to undercut the benchmark Toyota Prius by several thousand dollars while still achieving 40/45 mpg. Continued effort in this direction will allow Honda to add a hybrid Fit in a few years.
Fukui also has expressed skepticism of lithium-ion batteries, which he considers not ready for prime time-although Honda does use them in its FCX Clarity fuel cell car-and, as a result, is cool to the prospects of plug-in hybrids and battery-electrics. Instead, the company is forging ahead with the development of fuel cell cars-where Honda is the only manufacturer to put fuel cells into the hands of paying customers, albeit in small numbers. Will Fukui's independent course put Honda behind the pace, or is he steering around another costly diversion? It's too early to know, but one thing is certain: Honda's strong internal compass has kept it moving forward with a kind of plodding certainty that so many of today's naked swimmers can only envy.
Source;
http://www.automobilemag.com/features/awards/0811_2009_man_of_the_year_takeo_fukui/_honda_future.html
Say What?!? Big Three CEOs Flew Private Jets to Plead for Public Funds
Above are the 3 wisemen in question, how would you like to be one of the unfortunate workers that just got laid off (just before Christmas) and you see this. Ever wonder why they are in such bad shape?!? It seems like they are just asking for it.Auto Industry Close to Bankruptcy But They Get Pricey Perk
The CEOs of the big three automakers flew to the nation's capital yesterday in private luxurious jets to make their case to Washington that the auto industry is running out of cash and needs $25 billion in taxpayer money to avoid bankruptcy.
The CEOs of GM, Ford and Chrysler may have told Congress that they will likely go out of business without a bailout yet that has not stopped them from traveling in style, not even First Class is good enough.
All three CEOs - Rick Wagoner of GM, Alan Mulally of Ford, and Robert Nardelli of Chrysler - exercised their perks Tuesday by flying in corporate jets to DC. Wagoner flew in GM's $36 million luxury aircraft to tell members of Congress that the company is burning through cash, asking for $10-12 billion for GM alone.
"We want to continue the vital role we've played for Americans for the past 100 years, but we can't do it alone," Wagoner told the Senate Banking Committee.
While Wagoner testified, his G4 private jet was parked at Dulles airport. It is just one of a fleet of luxury jets owned by GM that continues to ferry executives around the world despite the company's dire financial straits.
"This is a slap in the face of taxpayers," said Tom Schatz, President of Citizens Against Government Waste. "To come to Washington on a corporate jet, and asking for a hand out is outrageous."
Wagoner's private jet trip to Washington cost his ailing company an estimated $20,000 roundtrip. In comparison, seats on Northwest Airlines flight 2364 from Detroit to Washington were going online for $288 coach and $837 first class.
After the hearing, Wagoner declined to answer questions about his travel.
Ford CEO Mulally's corporate jet is a perk included for both he and his wife as part of his employment contract along with a $28 million salary last year. Mulally actually lives in Seattle, not Detroit. The company jet takes him home and back on weekends.
Mulally made his case Tuesday before the committee saying he's cut expenses, laid-off workers and closed 17 plants.
"We have also reduced our work force by 51,000 employees in the past three years," Mulally said.
Yet Ford continues to operate a fleet of eight private jets for its executives. Just Tuesday, one jet was taking Ford brass to Los Angeles, another on a trip to Nebraska, and of course Mulally needed to fly to Washington to testify. He did not address questions following the hearing.
"Now's not the time to do that sort of thing," said John McElroy of the television program "Autoline Detroit."
"Now's the time to be humble and show that you're sharing equally in the sacrifice," McElroy said.
GM and Ford say that it is a corporate decision to have their CEOs fly on private jets and that is non-negotiable, even as the companies say they are running out of cash.
Private jet travel is perhaps the greatest perk of all for CEOs, who say it allows them to travel more efficiently and safely, even in a recession.
AIG, despite the $150 billion bailout, still operates a fleet of corporate jets. The company says it has put two out of its seven jets up for sale and is reviewing the use of others. Though there are no such plans by GM or Ford.
It appears that the senior management of the automakers simply don't get it," said Schatz.
-No kidding.
Source;
'Detroit meltdown' worries Toyota, Honda
Nicolas Van Praet And Alia McMullen,Financial Post Published: Thursday, November 13, 2008
Japanese automakers Toyota Motor Corp. and Honda MotorCo. say they are "very concerned" about the potential failure of Detroit's three car companies as analysts warn a bankruptcy would throw the entire auto supply base into chaos and rattle the operations of even the most profitable manufacturers.
The comments came as Canada's Finance Minister, Jim Flaherty, yesterday said some residents in his Ontario riding of Whitby-Oshawa, home to the Canadian headquarters and main assembly factories of General Motors Corp., don't want the government to hand GM and other Detroit automakers a bailout.
"We're very concerned" about a Detroit meltdown, said Mike Goss, spokesman for Toyota Motor Engineering &Manufacturing North America Inc. "In the past couple of days I've been asked 'Wouldn't it be great for Toyota if others fail?' We think the opposite is true."
The vehicles Toyota builds in North America contain an average of 75% domestically sourced parts and systems, and Toyota is reliant on many of the same suppliers used by GM, Ford Motor Co. or Chrysler LLC, Mr. Goss said.
The Japanese automakers are working to identify which suppliers have the biggest exposure to the Detroit firms.
They are also developing emergency plans in the event they need to replace a company providing them with parts. "Everything's on the table about what we might have to do," Mr. Goss said.
Should one or more of the Detroit three go bankrupt next year, all U. S. automotive operations, including those of the so-called new domestic manufacturers like Honda and Nissan MotorCo., will be paralyzed for at least one year because of the high likelihood many suppliers will run out of money, according to an analysis by the Center for Automotive Research, a think-tank based in Michigan.
"We expect a major wave in supplier bankruptcies or a 'supplier shock,' " the analysis said.
North America's roughly 6,000 auto suppliers are already under severe pressure from a collapse in U. S. sales of cars and trucks to 25-year lows, which has forced the Detroit automakers to cut output in the face of lower demand. Ford MotorCo. said yesterday it will temporarily shut down nine of its plants continent-wide this quarter as it builds 211,000 fewer vehicles than a year earlier, including Ontario assembly factories in Oakville and St. Thomas.
We're very concerned" about maintaining the stability of the supply base, said Edward Miller, spokesman for American Honda Motor Co. "Obviously this is very disruptive."
Mr. Flaherty said he expects U. S. lawmakers to craft a proposal for a rescue of the U. S. auto industry after GM warned last week it may not have enough cash to fund operations past this year amid a credit crisis. Discussions so far have centred around a bridge-loan package worth US$25-billion, in addition to US$25-billion worth of separate loans already approved to help the Big Three build more fuel-efficient vehicles.
"Economically, GM may prove too big to ignore simply because of the implications for not just employees, but also retirees and all the supplier companies if it was to collapse," said Nigel Gault, chief U. S. economist for IHS Global Insight Inc., an economic-analysis firm
Investors bet yesterday a bailout would go ahead, pushing up shares of GM by as much as 23% and Ford shares by as much as 11%.
Many Canadians say the federal government should do something to help the auto sector, Mr. Flaherty acknowledged at an economic conference in Toronto. "[But] there are lots of people that say, 'Don't do anything. Don't use my tax money to bail out an enterprise that may not survive.' " He added the views are not coming from rich constituents but "people on the street."
Mr. Flaherty said any aid Canada would offer would be for "transformational" support. "If we are going to do something, [we need] to find a way to ensure the sustain-ability, survivability, a product mix that is going to have profit here in Canada."
Henry Paulson, the U. S. Treasury Secretary, said yesterday automakers are a key part of the United States' manufacturing base but that any effort by government to rescue them "has got to be one that leads to viability."
Mr. Paulson is resisting pressure by Democratic lawmakers in the United States to use the US$700-billion Troubled Asset Relief Program, a bailout fund aimed at banks, to help Detroit.
Source;
http://www.financialpost.com/story.html?id=954380
10 vehicles that will redefine the auto industry in the next year
2010 Honda Insight
Toyota Prius facing off with the Honda Insight 
2010 Chevrolet Camaro
2010 Toyota VenzaBY MARK PHELAN
FREE PRESS COLUMNIST
From hybrids to big pickups, from luxury cars to thrifty compacts, a handful of new vehicles that debut over the next 12 months may shape the future of automakers around the world.
They come in all shapes and sizes. Some break new ground for their manufacturers. Others aim to reassert companies' dominance in market segments they created.
From icons like the Ford F-150 and Toyota Prius to newcomers like the Lincoln MKT and Chevrolet Traverse, they are the most interesting and important new cars to watch as the 2009 model year kicks into high gear and model year 2010 begins.
2010 Honda Insight
The five-passenger gasoline-electric Insight is Honda's attempt to remind buyers that it's a leader in hybrid cars. Honda was the first automaker to sell a hybrid in the United States when the previous two-seat Insight went on sale in 1999, but the flashy Toyota Prius quickly eclipsed Honda's mundane Civic and Accord hybrids.
Honda aims to change that with the 2010 Insight, which has the same hatchback profile as the Prius. Honda promises a base price "significantly below" other hybrids when it goes on sale in the spring of next year.
Other vehicles in the article;
2009 Audi A4
2009 Chevrolet Traverse
2010 Chevrolet Camaro
2009 Dodge Ram
2009 Ford F-150
2010 Lincoln MKT
2009 Toyota Venza
2010 Toyota Prius
2009 Mazda 6
Source and for the rest of the article;
Honda Numbers UP in a DOWN Market
Thanks to an ever-tightening credit market and record high fuel prices, analysts are predicting a 10 percent drop in new car sales for the month of May, a new report finds. Although the sales drop is expected to be fairly uniform across the board, it is expected that General Motors, Ford and Chrysler will be hit hardest, largely due to their reliance on trucks and SUVs.According to Automotive News, General Motors will likely report a 22 to 25 percent drop in new car sales for the month of May, while Ford is expected to check in with a 22 percent drop. Chrysler is expected to see at least a 20 percent decline in sales.
Despite an expected sales drop of 6.7 percent from May 2007, analysts predict that Toyota's market share will climb from 17.5 percent last month to 18.1 percent in May.
The only automaker expected to post a sales increase for May is Honda. Thanks to its lack of fuel-thirsty vehicles, the Japanese automaker is expected to post a 3.2 percent sales gain on May 2007.
Source:
http://www.leftlanenews.com/analysts-predict-10-percent-drop-in-new-car-sales-for-may-honda-only-automaker-to-see-sales-gain.html
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