Honda Motor will reduce manufacturing costs, both at home and overseas, for its revamped Fit [Jazz] subcompact by using more locally sourced parts and improving efficiency, company sources have said.
It plans to pass on the resulting cost savings to fund dealer incentives and improvements in vehicle functions, the Nikkei reported. An automatic braking system to avoid collision, for example, is being considered as a way of enhancing safety.
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Honda builds the Fit in nine countries worldwide for sale in 120 markets. The vehicle accounted for 20% of the company’s global sales tally of around 4munits in fiscal 2012.
The new model will go on sale in Japan on Friday, with the rollout to be expanded worldwide over a roughly one-year period. In emerging markets, where sales are expected to accelerate, Honda will increase local parts procurement and seek low-cost suppliers.
In India, local purchasing of components will rise to 90% from the current 70%. When it hits the market in 2014, the refurbished Fit is expected to be sell for less than the current model’s JPY900,000 price tag.
In China, local parts procurement will increase from 70% to 80%, while content in Brazil will be raised to 60% from 50%.
Honda will adjust specifications so that parts can be manufactured at local suppliers’ existing facilities. For instance, it plans to use thicker layers of ordinary steel sheet for the body instead of strong but more expensive materials.
Meanwhile, Fits for industrialised nations will be assembled at Honda’s new dedicated factories for subcompacts. These plants can reduce electricity bills by around 30% compared with other Honda factories by streamlining painting processes and other steps.
In Japan, such a plant began operations in Yorii, Saitama Prefecture, in July. Fits sold in North America, previously exported from Japan, will be shipped from a dedicated plant in Mexico set to come onstream next spring.
