Fast Cars Gear

Archive for September 6th, 2009

Honda Gains Rise On Fuel-saving Cars

The Honda Motor Co. announced last Wednesday that its firstquarter gains increased by 16 percent and such have been buoyed by demand for fuelsaving product lines in the United States and a weaker yen.

Additionally net income of the second biggest Japanese automaker increased to 166.1 billion or 1.4 billion in the three months ended June 30 as compared with its 143.4 billion in 2006. Honda won customers in the United States its biggest market from domestics General Motors Corp. and Ford Motor Co. with its Civic compact cars and CRV SUVs.

The Tokyobased automaker earns as much as 70 percent of its operating profit in the United States and benefited from a 5.3 percent drop in the value of Japanese currency against the dollar in the quarter reported International Herald Tribune. Honda’s worldwide sales rose 5.6 percent to 946000 vehicles from the same period last year.

Heat is building up and it must be controlled by a Honda del sol radiator. As the competition gets even tougher precise strategies are crucial. In June Honda and the Toyota Motor Corp. increased production to meet rising demand from North America Europe and Asia. Toyota raised global production 3.6 percent to 734354 vehicles in June while Honda’s global output rose four percent to 340400 vehicles the companies said in separate statements.

Toyota surpassed GM as the world’s biggest automaker by sales in the first half of this year bolstered by vehicle demand in the U.S. Honda increased its fullyear sales and gain forecasts amid surging demand for its fuel efficient Civic models reported Bloomberg.

Exports to North America have been strong” said Hirofumi Yokoi an analyst at CSM Worldwide an auto industry consulting firm. Japanese and Korean carmakers will continue to grab market share away from Detroit.”

Toyota’s overseas production rose 7.2 percent while output in Japan increased by 0.3 percent to 368513. The automaker’s exports rose 9.6 percent to 242101 and Honda exported 55207 vehicles down by 2.8 percent. Meanwhile Honda’s domestic production dived by 4.8 percent while overseas output climbed 9.2 percent Bloomberg added.

Moreover July domestic production is expected to decline as Japan’s 12 automakers lost output of at least 120000 vehicles after Riken Corp. Japan’s biggest piston rings supplier ceased production because of a July 16 quake in Niigata area. Carmakers will likely make up for the lost production by the end of the fiscal year said Fujio Cho the chairman of the Japan Automobile Manufacturers Association.

Even amid increasing rawmaterial costs and expenses related to new production facilities Hondas net is bolstered. The automaker said that its brisk sales and the positive effects of the weak yen which helps Japanese automakers by increasing the value of overseas earnings when converted into Japanese currency led to its net profit of 166.1 billion yen or 1.38 billion in the three months ended June 30 up from 143.4 billion yen in the same period in 2006.

Honda increased its netprofit forecast for the year ending March 31 to 625 billion yen a 5.5 percent increase from the year earlier. Honda’s estimates were based on a conservative exchange rate of 115 yen to the dollar. So far this fiscal year the dollar has remained at about 120 yen causing the car maker to recalculate its earning said Amy Chozick an automotive writer.

Last week Chief Executive Takeo Fukui said that Honda will increase its capacity worldwide to meet demand. A new U.S. car plant will open next year with an annual capacity to produce as many as 200000 vehicles. Honda expects annual production in North America to reach 1.62 million vehicles by the fall of 2008 up from 1.4 million cars this year.

About the writer:  Anthony Fontanelle is a 35yearold automotive buff who grew up in the Windy City. He does freelance work for an automotive magazine when he is not busy customizing cars in his shop.