The US vehicle market will contract by about 5% in 2009, a senior Honda Motor executive has said, adding that the company may reduce production further.
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Speaking at the launch of the eighth generation domestic market Accord in Tokyo, executive vice president Koichi Kondo said that it was “difficult” to see when the US market would recover. He added, however, that he felt the US market had bottomed out.
Honda, he said, was expecting the total US market to account for 12.5 to 12.6m vehicles in 2009, compared to close to 13.3m this year.
Meanwhile, CEO Takeo Fukui warned that it was “very possible” Honda would implement further production cuts. He added that the only market in which that Honda had not been much affected was China.
Honda also said today it was axing nearly 500 temporary employees in Japan.
Yesterday it emerged that Honda was to put off boosting output capacities in Turkey and India in light of weak sales worldwide.
A Kyodo News report said that the worsening business climate may also force Honda to delay its planned production increase at its plant in the US state of Indiana.
Honda’s decision to postpone the output capacity increase in India and Turkey stems from slackening demand in Russia and other emerging economies, Honda officials said.
Last month Honda said it would cut production in the US as falling sales and the country’s economic turmoil continue to play havoc with the auto industry there. The news followed announcements of production cuts by the Japanese giant in the UK and on its domestic market.
Honda said that it would lower its US output by another 18,000 vehicles taking total production for the fiscal year ending 31 March 2009 down by 56,000 units to 1,412,000.
