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February 3, 2011

UK/JAPAN: Honda rules out more English CR-Vs for US

Plans to source more Honda CR-Vs for North America outside Japan will not include the British plant which has previously built the model for that market.

Plans to source more Honda CR-Vs for North America outside Japan will not include the British plant which has previously built the model for that market.

“There are no plans,” a spokesman for Honda UK Manufacturing’s Swindon factory told just-auto.

On Wednesday, Honda Motor chief financial officer Yoichi Hojo told Reuters Honda was looking to make small investments in North America to build more of the popular CR-V crossovers there, reducing exports from Japan to cushion the blow from a strong yen.

“Our profit structure has improved mainly thanks to robust overseas operations, and the toughest area remains exports from Japan,” he said at Honda’s headquarters.

“With a little investment, we would be able to increase production of the CR-V in the United States, so that’s the most probable course of action (to reduce yen exposure),” he said.

Japanese automakers are reeling from a strong yen, now trading at around 81-82 to the dollar, losing money on lower-margin models that are exported from domestic factories.

Honda already has the least currency exposure among Japan’s top automakers given its relatively low export ratio of 30%. Last year, Toyota shipped 53% of its Japan made vehicles, and Nissan Motor 59%.

According to Reuters, Honda, Japan’s third-biggest automaker, built about 72,000 CR-Vs in Japan last year, exporting about 35,000 of them to the United States. Honda also builds the model in Mexico and East Liberty, Ohio and the English plant supplies its home market and Europe.

Hojo said Honda was looking at various options for raising production of the CR-V in the United States, where two of its four assembly plants, including the East Liberty factory, are operating at full capacity while the adjacent Marysville plant is working at around 80%.

Honda also has a factory in Indiana working at half of its full capacity and a plant in Canada at around 88%.

With petrol prices still relatively stable, more US consumers are buying light trucks instead of passenger cars, and Hojo said Honda was boosting daily production at one of its two lines at its Alabama plant by 50 units to 650 units from this month to meet demand for the Odyssey minivan and Pilot SUV.

UK CR-V production for the US – it supplied only a portion with the rest shipped from Japan – ended with the last full model changeover in 2007 but there was some thought in the US that, if demand for Civics built at East Liberty and Alliston, Ontario remained at high levels, more UK vehicles would be required though that did not, in the end, happen.

Nissan said last month it would shift production of its Rogue crossover from Japan to the United States at its next remodelling in 2013.

Hojo said Honda, like other Japanese automakers, would look to use more components from low-cost countries such as China and India to take advantage of the strong yen, also making those adjustments when vehicles are renewed.

Honda is due to revamp its high-volume Civic this spring, and Hojo said he expected new low-cost parts to account for at least 10% of the car, from virtually none now.

Honda has already raised that ratio on the low-margin Fit [Jazz, also built in England, for Europe] subcompact to 17%, and is aiming to boost that to about 30%, Hojo said.

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