The Pretty Side Of Honda

There has been a lot of, well, criticism, of Honda on these pages lately, including allegations that Honda had lost it. So far, more that fifty of the Best & Brightest offered advice on how to save the company from certain annihilation.

Today’s Nikkei says “domo arigato gozaimashita” for all the support, and runs a different story: “Honda Motor Co. has emerged from the economic turmoil at the head of the pack, thanks in good part to a nimble production network that can meet the latest consumer preferences at relatively low cost.” Here is why.

According to the Nikkei, Honda retooled its U.S. production operations in a mere six months last year, responding to the sudden demand for smaller vehicles. As the chart shows, the realignment translated into a substantial share of the U.S. subcompact market.

It is also the reason for Honda being “the only major Japanese maker likely to score a net profit” in the current fiscal year, says the Nikkei.

Capacity utilization rates at some facilities have been boosted by as much as 20 percent. In the current fiscal year, which ends March, Honda will most likely report an overall utilization rate of 79 percent, highest among Japan’s three largest automakers. In the industry, anything above 80 percent utilization is considered healthy. Given the worldwide capacity utilization, estimated to be between 50 and 60 percent, 79 percent are short of a miracle.

Honda can make small and large vehicles on the same production lines. All it needs is a quick change of welding pieces, paint nozzles and other components.

Not only the Nikkei is impressed with Honda, the stock market likes Honda as well. At the time of this typing, Honda’s stock (HMC) changed hands for $36.90 at the New York Stock Exchange, eclipsing its pre-carmageddon highs.

Honda may have “ugly styling highlighted by uglier front grilles; a hybrid system that simply isn’t as advanced and effective as Toyota’s; a bloated Accord; no new direct injection engines; lots of muddling about future EVs; and a misplaced optimism about fuel cells,” as Edward Niedermeyer wrote it.

However, Honda’s stock chart, a market capitalization of $67.7b, and a near-pornographic P/E of 47.92 on the other hand are a sight to be seen. Maybe you shouldn’t have bought the Insight. But you would be very pleased if you would have had the foresight to buy the Honda stock in December of 2008. You could have doubled your money.

Or, looking at the chart and all that’s wrong with the company, maybe it’s time to short HMC?

Source;
http://www.thetruthaboutcars.com/the-pretty-side-of-honda/#more-342097

New Honda CEO: U.S. Recovery to Take Two Years or More

New Honda Motor Co. Ltd. CEO Takanobu Ito says the light-vehicle market in the U.S. may be depressed for another two years, possibly longer.

“When you look at the state of the (U.S.) economy, it's difficult to imagine that it would recover in the next two years,” Reuters reports Ito as saying at his first public speech in Japan today.

Honda’s U.S. sales are down 33.5% through June, slightly better than the total LV falloff of 35.1%, Ward’s data show.

Ito says the emerging markets of China and India still hold promise for Honda. As such, he wants Honda to go head-to-head with Tata Motors Ltd.’s Nano, a stance opposite that of former Honda CEO Takeo Fukui, who believed Honda’s motorcycles were an appropriate, low-cost option for Indian buyers.

“In India, they adore such low-cost vehicles, and we should respect such desires,” Ito says of the Nano, without divulging any details about Honda’s plans for a rival vehicle.

Meanwhile, Ito reiterates Honda’s desire to bring two new hybrid-electric vehicles to market next year in Japan.

The CR-Z sport coupe is due to arrive in February, while an HEV version of the Fit subcompact is to launch sometime before the end of 2010, he says.

Only the CR-Z is slated for the U.S. and Europe, with timing still undetermined.

Honda recently launched its next-generation Insight HEV, which Ito says is doing well in Japan.

Honda added another shift of production at its Suzuka plant in mid June to meet demand.

However, U.S. sales of 7,524 units through June are off pace of the 80,000-90,000 Honda hoped to sell in the U.S. this year, which Ito blames on prioritizing Japan orders and production capacity limitations.

Ito says Honda has placed almost all engineers formerly devoted to its Formula One racing activities on hybrid development.

Honda, Ito says, is accelerating development on a hybrid system similar to that of rival Toyota Motor Corp., which utilizes two electric motors in concert with a gasoline engine. The system is due to be installed in medium and large vehicles.

Source;
http://wardsauto.com/home/honda_us_recovery_090713/