Honda aims to double sales by 2017

HONDA plans to double its car sales to more than six million vehicles within five years, driven by an ambitious new-model roll out and fed by new small-car plants in Japan and Mexico.

The strategy for Honda growth was spelled out last week by Honda Motor Company president and CEO Takanobu Ito who indicated Honda was preparing to go on the counterattack in mature markets such as North America while also growing its business in emerging markets such as India, China and Africa.

The process will be underpinned by a new vehicle development philosophy that will allow Honda’s six global regions more autonomy in vehicle design on each of Honda’s new-model platforms while simultaneously bringing vehicles to production with Honda’s core engineering centres in Japan and the United States.

Last financial year, Honda sold 3.1 million vehicles globally, down from 3.5 million the previous year in a slump attributed to 2011’s natural disasters in Japan and Thailand.

Those disasters came hard on the heels of the global financial crisis which clipped Honda’s vehicle sales that had peaked at 3.7 million units in 2007.

From top: Honda CEO Takanobu Ito Honda Brio Honda City.

While sexy new niche models such as a new Civic Type-R, hybrid NSX, fuel-cell vehicle and mini open-top sports car are all under development (see separate story), Mr Ito indicated that one of the key new models in this growth strategy will be the new-generation Jazz (Fit in some markets) that will spawn a range of new models targeted at specific markets.

Australia is likely to be on the receiving end with up to four of those vehicles – the next Thai-built Jazz five-door hatch, City sedan, an unnamed small SUV and – potentially – a mini people-mover to be built in Indonesia.

The new Jazz that is slated for global release in 2013 will also help drive growth in North America as Honda pitches smaller cars at that market.

Mr Ito, who has been Honda president since 2009, announced that a new factory would be opened in Mexico in 2014 to build that car and “a derivative model”.

The Jazz and spin-off variants will also go into production at a new plant in Yorii, Japan, from mid 2013.

Like the Mexican plant, this factory in Saitama prefecture – where Honda has other major factories – will be dedicated to small vehicles.

Mr Ito said that across the mature markets of Japan, North America and Europe, Honda planned to increase sales by 50 per cent from two million last year to more than three million by 2017.

But sales growth in emerging markets would be even stronger, will projected sales doubling to more than three million vehicles during the same five-year plan period.

“By solidifying sales in advanced counties and growing dramatically in emerging nations, Honda will strive to achieve worldwide automobile sales of more than six million units in financial year 2017,” Mr Ito said.

Mr Ito said Honda would strengthen its Chinese local development capability, “to put more focus on local customers” as it rolls out 10 new vehicles and full-model changes between 2013 and 2015. As well, models specifically developed for China would be introduced.

The new models in China would include a high proportion of hybrids to handle the “strictest fuel economy regulations in the world”, Mr Ito said.

In Asia, one of the key vehicles will be the sub-Jazz Brio budget hatchback designed specifically for Asia.

Mr Ito said Honda was planning to add a Brio-based sedan, along with a “utility-type model” – thought to be a baby crossover vehicle even smaller than the planned Jazz-based SUV.

In India, Honda is pinning its hopes on a new diesel engine that will be rolled out across various models starting next financial year.

“In addition to the high fuel efficiency, the cost competitiveness of the all-new diesel engine will be enhanced through local sourcing and local production to make new diesel models more affordable for customers,” Mr Ito said.

Apart from cars, Honda is also preparing to push up motorcycle and power equipment sales from last year’s 15 million and 5.8 million respectively.

All up, Honda is planning to expand its annual sales from last years 23.9 million to more than 39 million in the next five years.