American Honda to boost North American output depending on demand

Article by Anita Panait, on October 24, 2012

American Honda Motor Co. is now ready to increase its production capacity at its plants in the United States or Canada, or at its still-being constructed factory in Mexico. The eventual increase in production capacity, however, will depend on which vehicle segments have posted the most growth in the next few years.

Tetsuo Iwamura, chief executive of American Honda, told Automotive News that by 2016, the carmaker’s sales in North America will increase to \"more than 2 million\" units, from just around 1.7 million in 2012.

As for its global growth, Honda is striving to hike sales by 50 percent within four years to six million vehicles, with most of the growth expected to flow from developing countries like India, China and Brazil. As for North America, Honda expects to post an 18-percent increase in sales within four years.

Forecasts made by IHS Automotive and LMC Automotive show that light-vehicles sales in North America will increase by around 15 percent during the four-year period. Iwamura told Automotive News that he expects Honda to boost sales in all segments, particularly in small cars, with the help of vehicles to be produced from the plant under construction in Mexico. Honda initially plans to build 200,000 small cars every year at the Mexican plant, which is due to open in 2014.

Iwamura further told Automotive News that if the market allows it, Honda would not hesitate to expand capacity. The Mexico plant is bound to only produce small cars, including \"multiple\" derivatives of the Fit subcompact.

This means, that if the demand for the mid-sized Accord or other larger models spikes, Honda might need to increase production at the U.S. or Canadian plants that produces those nameplates. Honda is already planning to add 40,000 units of capacity in 2013 at its Lincoln plant in Alabama, which produces the Odyssey, Pilot and Ridgeline. According to Iwamura, Honda is on its way to sell around 1.47 million cars and trucks in the US this year, which would allow the carmaker to post a 28-percent increase over 2011.

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