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Report: Honda May Move Fit Production to U.S.

Move would allow Honda to sell Fit at lower MSRP

 |  Oct 20 2009, 10:14 AM

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Honda is reportedly considering moving production of the sub-compact Fit to the U.S. Company president Takanobu Ito said the move is a “highly likely possibility.”

The move makes good economic sense as the poor exchange rate between the U.S. dollar and Japanese Yen means that profit margins on the Fit are extremely slim. Moving production to the U.S. would greatly increase those margins, meaning that Honda could significantly improve how much it makes in each unit sold, or offer the car at a lower price. (Or, more likely, a bit of both). As it stands, the Fit is already the most expensive sub-compact on the market, although in so many ways it has proven its value. But Honda is about to face a lot more competition with Ford set to launch the Fiesta and Mazda ready to launch the Mazda2.

Ito also commented that Honda is likely to move more of its production of mainstream models to the U.S., while keeping the build process of more technologically complex and expensive models, like hybirds and sports cars, based in Japan.

[Source: Automotive News via Autoblog]