Honda said it will give its lineup a boost with the launch of a new SUV in Europe. Honda is hoping to improve its profitability and turn around its sales in the European market. Honda CEO Takanobu Ito said that this vehicle will be based on the next-generation Jazz subcompact, which is set to be launched in 2013.
IHS Automotive said that the subcompact SUV market is predicted to increase to half a million models in Europe by 2018. In 2011, its sales exceeded 200,000 with the most popular cars being the Nissan Juke and Dacia Duster. A Honda Europe spokesman told Automotive News Europe that the Juke is a car that has formed its own niche. He said that it won’t be a direct rival but it would be in the same sector.
The new Honda faces competition from the upcoming Peugeot 2008, which was previewed in concept form at the Paris Auto Show, and in the Opel/Vauxhall Mokka, which starts selling in early 2013. At the Geneva auto show earlier this year, former Opel CEO Karl-Freidrich Stracke told journalists that the Corsa-based Mokka is expected to sell over 50,000 units annually.
A spokesman said that Honda's new SUV would probably be produced in Swindon, near London. But then, a bidding will have to take place at the plant for the job. He added that there’s nothing certain yet but then he also pointed out that the Jazz has been produced there since 2009. He emphasized that it’s not profitable to export cars from Japan.
Honda sold a record 331,000 cars in Europe in 2007, giving it a 2% market share and so it posted a profit. Since that time, sales have dropped by more than half. Industry association ACEA said that it had a volume of 159,000 in 2011 and 92,200 after eight months of 2012. Furthermore, Honda's market share has decreased to 1.1%, which has resulted to consistent financial losses at Honda’s European unit.