Honda will try to reduce the number of cars it imports from Japan to the U.S. for one simple reason: the automaker loses money on nearly all vehicles imported here.Automotive News reports that Honda will attempt to build more American-market cars in the U.S. to help stem losses from importing vehicles.
Shipping vehicles from Japan is no longer profitable because of the high Yen-to-dollar exchange rate. In the short term, Honda plans to reduce the number of vehicles it exports to the U.S., meaning some dealers won’t get as many new cars as they expect. “Definitely, the absolute number of exports to the United States will be decreasing,” Honda CFO Fumihiko Ike told Automotive News.
Longer term, Honda plans to combat losses related to exchange rates by building more vehicles in America. The company has already been very proactive about opening factories here: in 2011, 85 percent of Honda and Acura vehicles sold here were built on American soil. Honda has nine manufacturing plants in six U.S. states, although some of those cater to power equipment like lawnmowers and ATVs.
In the future, however, even more vehicles will be made in North America. Honda recently announced that it will source the U.S.-market Fit hatchback from Mexico starting in 2014, and a new report suggests the portion of CR-Vs sold in North America previously supplied by Japan will now come from Ontario, Canada. The remainder of CR-V production comes from within North America, much like most other Honda models. At this point, the only lines imported from Japan are the CR-Z, Fit, and Insight, although Canadian-market Fit models are also sourced from a Honda-owned facility in China.
The decision to build more cars in North America is not unique among Asian automakers. Nissan has invested heavily to build cars like the new Rogue crossover, Leaf electric and Infiniti JX crossover in the U.S., and both Hyundai and Kia are aggressively expanding American plants. In fact, a recent study suggests that 70 percent of Japanese-branded cars sold in America are built in the U.S. Mazda, however, has been scaling back its U.S. workforce and is moving production of the next Mazda 6 from Michigan to Japan.
Sources: Automotive News, Honda