Honda is not expecting profitability in Europe until 2013 or 2014, when 80% of vehicles sold will be sourced from its British facility. Even with the two straight years of losses as well as a market share of only over 1%, Honda Europe President Manabu Nishimae disclosed that the automaker had no intentions to exit what is considered as a intensely competitive market swarmed by rival offering margin-eroding incentives in order to offset declining volumes.
Nishimae stated that the vehicle market in Europe is all about beautiful design and high technology for the interior and exterior.
Thus, the automaker's reputation among customers in Europe affects demand in other regions, he added. In order to strengthen the brand in Europe, Nishimae disclosed that he was searching daily for ways to reduce its exposure to the yen, which closed at a 10-year high to the euro last year. Imports into Europe currently comprise 40% of Honda's sales in the region, making many of the automobiles uncompetitive at present yen rates.
Nishimae revealed that in Japan, they will focus on manufacturing mini and small automobiles for the Japanese market, says Autonews. He added that he wants to lower imports to 20% or less as soon as the automaker doubles annual output in its Swindon facility in England to almost 180,000 vehicles this year.
Honda also is studying whether to import Accords from the United States, which could possibly slash shipping times to around seven days from more than four weeks. Moreover, Nishimae intends to recruit more engineers to assist in inspecting and certifying the quality of European suppliers which Honda could procure its components from. Only around 60% of the vehicle components that Swindon presently sources are from Europe.