The Pretty Side Of Honda

Bertel Schmitt
by Bertel Schmitt
the pretty side of honda

There has been a lot of, well, criticism, of Honda on these pages lately, including allegations that Honda had lost it. So far, more that fifty of the Best & Brightest offered advice on how to save the company from certain annihilation.

Today’s Nikkei says “domo arigato gozaimashita” for all the support, and runs a different story: “Honda Motor Co. has emerged from the economic turmoil at the head of the pack, thanks in good part to a nimble production network that can meet the latest consumer preferences at relatively low cost.” Here is why.

According to the Nikkei, Honda retooled its U.S. production operations in a mere six months last year, responding to the sudden demand for smaller vehicles. As the chart shows, the realignment translated into a substantial share of the U.S. subcompact market.

It is also the reason for Honda being “the only major Japanese maker likely to score a net profit” in the current fiscal year, says the Nikkei.

Capacity utilization rates at some facilities have been boosted by as much as 20 percent. In the current fiscal year, which ends March, Honda will most likely report an overall utilization rate of 79 percent, highest among Japan’s three largest automakers. In the industry, anything above 80 percent utilization is considered healthy. Given the worldwide capacity utilization, estimated to be between 50 and 60 percent, 79 percent are short of a miracle.

Honda can make sm

all and large vehicles on the same production lines. All it needs is a quick change of welding pieces, paint nozzles and other components.

Not only the Nikkei is impressed with Honda, the stock market likes Honda as well. At the time of this typing, Honda’s stock (HMC) changed hands for $36.90 at the New York Stock Exchange, eclipsing its pre-carmageddon highs.

Honda may have “ugly styling highlighted by uglier front grilles; a hybrid system that simply isn’t as advanced and effective as Toyota’s; a bloated Accord; no new direct injection engines; lots of muddling about future EVs; and a misplaced optimism about fuel cells,” as Edward Niedermeyer wrote it.

However, Honda’s stock chart, a market capitalization of $67.7b, and a near-pornographic P/E of 47.92 on the other hand are a sight to be seen. Maybe you shouldn’t have bought the Insight. But you would be very pleased if you would have had the foresight to buy the Honda stock in December of 2008. You could have doubled your money.

Or, looking at the chart and all that’s wrong with the company, maybe it’s time to short HMC?

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  • Stingray Stingray on Jan 19, 2010

    Good analysis on the stock price. However, despite the loses, Toyota's stock has raised to 90 from 60 last year. And it has been steadily going up. Same for the Ford stock. But in this case, you'd have earned 10 times your investement, from 1$ in about June-July to the 11 posted today. Sadly, I didn't purchase them. What is the minimum in $$$/stocks than can be purchased in of one company? Because, even starting with peanuts you could build a nice amount in some months with clever buying/selling. And still have stocks.

  • Accs Accs on Jan 30, 2010

    Hmmmm I find it quite amazing to look at: Honda of Japan Honda of Europe Honda of US / Canada and Honda. The US stuff... or the stuff we get.. has got to be some of the worst inspiring crap... that Honda produces. Yes, we get a CUV that shares parts with the Ridgeline and the Ody. We get a BASE version of a very nice, but PORKY car for the US.. Against a We get a 2dr and a 4dr Civic, paired with a Si, thats weak as hell. Ya got competitors that do much better with less, ntm a high displacement motor, better interior design.. AND more variation on a sport model I mean C'MON, Honda CAN produce a 3and 5dr hatch, along side a 2 and 4dr with the Si. But it might intrude on the Fit / Jazz production. Heck.. Honda is the most nimble in production OUT OF any of the Japanese (besides Toyota) but the amounts that even THEY sell is BADLY tilted towards the heavy and useless shit. In the US market, ya got the 2.5 Mazda 3 hatch, a GTI with a TURBO, Impreza with awd and the WRX (the domestic stuff from FORD is a couple of years out).. but there is plenty of competition. I could even live with the bad interior of the Civic is the body was in more variations... Jeez.. Who gets the shaft?! Now from someone who would buy their stock.. They are a stable company, with manufacturing prowess, full flexibility and if ya buy into how Honda builds an interior, or justifies 2 vehicles for a 3 or 4 range or how lack of hatches in the U.S.. then its all understandable. Buying Honda stock.. is a shoe in. And I for one.. base my opinion not just from what I see in the U.S, but from everywhere on the globe. If the company isnt doing well financially.. then buying their stock is pointless. Ex FORD and their stock v GM and theirs.

  • Akear The Prius outsells all GM EVs combined, which is really not saying much.
  • Akear The sad truth is the only vehicle FCA sold that broke the 200,000 sales barrier was the 200. I rented one and found it impressive. It is certainly better than the Renegade. At this point I would buy a used 200 over a Renegade. Who in their right mind would buy a Renegade?
  • Akear I just realized 80% of these EV vehicles producers are going to be liquidated within the next five years. It is not possible to survive by selling only 3000 vehicles a year. This reminds me of the bust of the late 90s and early 2000s. Those who don't learn from history repeat it.
  • 3SpeedAutomatic I drove a rental Renegade a few years back. Felt the engine (TIgerShark) was ready was ready to pop out from under the hood. Very crude!! Sole purpose was CAFE offsets. Also drove a V6 Cherokee which was very nice and currently out of production. Should be able to scoop up one at a fair deal.🚗🚗🚗
  • Inside Looking Out This is actually the answer to the question I asked not that long ago.