Thursday, May 26, 2011

WSJ: Honda To Resume Full North American Auto Production In August

By Mike Ramsey

DAYTON, Ohio (Dow Jones)--Honda Motor Co. (HMC, 7267.TO) will return its North American auto production to normal levels for all but one vehicle in August, faster than the company expected, the company said in a statement Thursday.

Honda has been running its plants at around 50% of their normal volume since April because of limited supplies of critical parts. Honda, Toyota Motor Corp. (TM, 7203.TO) and Nissan Motor Co. (NSANY, 7201.TO) have all limited their production this year because of the massive March 11 earthquake that damaged dozens of parts suppliers, particularly electronics makers.

Unfortunately for Honda, the lone car built in North America that won't return to full production in August is the redesigned Civic. Production of the vehicle will remain at 50% of projected volume because of limited supplies of parts and return to normal sometime in the fall, the company said. The Civic is one of Honda's best-selling models and the redesigned model was expected to help drive sales this year, reversing a market-share decline.

"The light at the end of the tunnel is glowing brighter for us, represented by this significant improvement in our production situation," said John Mendel, executive vice president of American Honda Motor Co., in the statement.

Honda, with more production in North America than Toyota or Nissan, has been the slowest to return its plants to higher volume. Nissan's U.S. production missed only a few days and Toyota is ramping back up most of its plants in North America next month.

Low inventories of key vehicles, combined with few incentives from Honda and maybe the perception that cars aren't available, are expected to drag down Honda's sales results in May., a consumer research and vehicle pricing website, predicts Honda's May sales will decline 26%, the most of any major manufacturer.

Honda's Mendel last week sent a letter to dealers to encourage then to push for sales harder and to say that supplies wouldn't run out because sales results were disappointing at that point in the month.


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