Honda said it expects worldwide sales to rise 5% to an all-time high of 3.5 million vehicles this year amid booming overseas demand.
TOKYO (AP) — Honda Motor Co. said Tuesday it expects worldwide sales to rise 5 percent to an all-time high of 3.55 million vehicles this year amid booming overseas demand.
Honda—which makes motorbikes, robots and light aircraft, as well as the Odyssey minivan and Civic compact—expects U.S. sales to rise 3 percent to 1.51 million vehicles in 2006, marking a sales record for the 10th consecutive year.
Soaring U.S. sales of light trucks and SUVs, especially the Honda CR-V, led the overseas increase at Japan’s No. 3 automaker, President Takeo Fukui told reporters at a year-end press conference Tuesday. To meet demand, he said Honda’s Mexico plant would begin making CR-Vs in late 2007.
The automaker plans to unveil a new Accord sedan and a next-generation sports car at the Detroit motor show in January. For 2007, Honda expects a further 3 percent increase in sales to 1.56 million units in the U.S.
Business was also brisk in Europe, where sales are seen climbing 8 percent to 310,000 units this year, and rising 13 percent to 350,000 in 2007.
To keep up with demand, Honda said it would boost output at its British plant to 250,000 units from 190,000 last year, lifting its European production to 300,000 units when combined with its plant in Turkey.
In Asia outside Japan, Honda is forecasting sales to rise 4 percent to 320,000 units this year and jumping 13 percent to 360,000 vehicles in 2006, the company said.
But business was sluggish in Japan, with vehicle sales expected to dip 5 percent to 350,000 vehicles in 2006 amid tough competition in an automobile market that has been shrinking overall.
A shift to smaller cars in Japan has also hurt sales of Honda’s larger models. Sales of mini-vehicles are forecast to top 2 million this year for the first time, and now account for about 35 percent of Japanese new car sales, according to industry statistics.
“Overseas sales are booming across the board, but conditions in the home market have been difficult,” Fukui said. “We hope to strengthen our product offerings and revitalize the flagging market.”
Still, Honda’s robust global sales underline the bright outlook facing many Japanese automakers, including Honda and Toyota, which have been expanding and booking record earnings, while U.S. rivals such as General Motors Corp. and Ford Motor Co. battle sagging sales by closing plants and cutting production.
In May, profit-rich Honda Motor Co. announced sweeping expansions plans to spend $1.18 billion (euro920 million) on new plants in the United States, Canada and Japan.
The automaker said Tuesday it would spend 25 billion yen ($211 million) to build a new engine plant in Japan to meet the expanding market to add to that capacity. The plant will be built in Saitama prefecture, just north of Tokyo and begin production in mid-2009. It will have an annual capacity of 200,000 units.
In Honda’s newly launched light passenger aircraft business, orders topped 100 units for 2005, beating its own target of 70 units. Honda expects to deliver its first HondaJet to customers in 2010, Fukui said.
Honda also said it expects global sales of motorcycles to rise 3 percent to 12.7 million units in the year to Dec. 31.
Though Honda’s global vehicle sales have been robust, the automaker’s profits slipped 4.3 percent in the quarter ended Sept. 30 amid soaring raw material costs and research costs.
Honda posted a group net profit of 127.9 billion yen ($1.1 billion) for the July-September period, down from 133.7 billion yen the same period a year ago, also hurt by expenses for hedging interest rates and foreign exchange.
But for the first six months of the fiscal year, Honda recorded 271.3 billion yen ($2.3 billion) in profit, up 11 percent from the same period last year, on 5.23 trillion yen ($43.8 billion) sales, up 13.7 percent from a year earlier.
Honda shares fell 0.91 percent to 4,320 yen ($36.61) on the Tokyo Stock Exchange Tuesday. The company’s share price has risen steadily in the past year.