Honda Exports from Japan Losing Money in U.S.

Honda Exports from Japan Losing Money in U.S.

According to Honda CFO Fumihiko Ike, vehicles made in Japan and exported to America for sale are currently “losing money.”

As a result, the Japanese automaker is carefully allocating the shipments that are making their way to America, which include the Fit, Insight, and CR-Z models. Consequently, we can expect to see fewer of these vehicles at North American dealerships in the coming months while Honda tries to shift more of its production to these shores.

The main reason is the current yen-to-dollar exchange rate, which is around 80 yen per dollar. It’s the first time any Japanese automaker has admitted that exporting vehicles comes at a loss. On the bright side, Honda currently manufactures about 85 percent of its vehicles sold in America, in America. Interestingly enough, Ike’s comments suggests that Honda’s rivals Toyota and Nissan could be facing the same situation, with even less production Stateside.

So why keep selling those models? Well, for Honda and other automakers, it’s to ensure segment markets are covered and it keeps customers coming in and out of dealership showrooms. One of the main moves Honda is doing to rectify the problem is developing a new plant in Mexico, which will be producing the Honda Fit at the very least.

In addition, the Japanese automaker is seeking a local supplier for hybrid components such as lithium-ion batteries. Even though the hybrid variant of the upcoming Acura ILX is produced in America, its batteries are still shipped from Japan.

[Source: Automotive News]