Unprofitable Imports Alter Honda Product Plans

Derek Kreindler
by Derek Kreindler
unprofitable imports alter honda product plans

Even though 85 percent of Hondas sold in North American are built on the continent, the strong yen is hurting the company’s Japanese exports to the point where Honda is losing money on them.

Imports from Japan include the Acura TSX, the CR-Z and Insight Hybrids, some versions of the CR-V and the Fit subcompact. Honda CFO Fumihiko Ike told Automotive News that the Fit makes no profit when exported to the United States, but Honda feels that it’s an important car for dealers to sell and as a means of luring and retaining younger customers.

Honda, like other manufacturers, is planning on shifting even more production to North America. The Acura ILX is being built in Indiana rather than the planned Japanese site. The ILX Hybrid is the only hybrid product built by Honda in North America, as Honda is far from the 100,000 units per year needed to make North American production worthwhile by roughly 69,000 units.

Rival automakers like Nissan and Toyota still build 70 percent of their vehicles in North America, and are scrambling to catch up to Honda’s figure. But for dealers, developments like Mexican production of the Fit can’t come soon enough, especially with government incentives for small, fuel-efficient cars in Japan boosting demand for the Fit, further straining stateside allocation.

Join the conversation
8 of 10 comments
  • Grzydj Grzydj on Jun 11, 2012

    The Fit is an important car to the US market because it's the only good car that Honda currently makes.

    • See 3 previous
    • 28-Cars-Later 28-Cars-Later on Jun 12, 2012

      @28-Cars-Later Agreed. Fit SI would be kinda cool, would be a nice way to recap some of the Yen/Dollar costs since you could offer a higher price point for not much more engineering.

  • Marcelo de Vasconcellos Marcelo de Vasconcellos on Jun 11, 2012

    Hoda should take a page from what Fiat is planning on doing and just import the car from Brazil into Mexico and then America. Doubt it couldn't turn a profit on that.

  • Ciddyguy Ciddyguy on Jun 12, 2012

    I've loved Honda in the past, but my immediate thought was upon reading this was so what? I'd be after the Fit too if I were to buy a Honda, but I find the Fit not sporty enough, especially with the autobox, never mind its versatile hatchback design. but upon further reading, I put that thought aside. I think I may be a bit too harsh on Honda, then again, I did just come off a day trip road trip over the weekend in my Mazda Protege5 and even though I was mostly traipsing up and down I-5, it was a joy to drive.

  • Dwight Dwight on Jun 12, 2012

    Make a civic wagon/hatch in North America at a decent price and suddenly the civic has new customers. It's working for Ford and Mazda. The civic is already just as fuel efficient as the Fit. Bring it on.