Honda Cuts Exports to USA

Honda is limiting Japan-made cars exportation to the U.S. because it is losing money on them. This news was said by Honda CFO to Automotive news.

The weekly trade journal also reported this comments and says that this is the first admittance by a Japanese car company that it is losing money on exporting cars to the U.S. Here the main issue is the present dollar’s weakness vs. the yen( it’s currency), which cuts the value of a U.S. Sale.

According to the Honda CFO “Under current exchange rate of 80 yen per dollar, their export business doesn’t make any profit”. If the Ike’s company is not profited then definitely, number of exports to the United States will be decreasing.

Due to exchange issues, automakers expanded production plants as well as other operations- from design-studios to proving grounds. Foreign-exchange trap will also be not there because vehicles are sold where they are built so that the costs and sales revenue are in the same currency.

However, Honda already made 90% of the vehicle sales at North American plants and also it is building another one in Mexico and planning for production in other U.S. cities.

According the CFO, Honda, Honda will move for more hybrid production to North America.”

Honda will continue to move some money-losers to the U.S. because, “They need to keep their customer base,” the CFO said and “for the sake of our dealers. At least they have something.”

Honda’s U.S. officials hinted at the problem recently in explaining low sales of the redone Insight hybrid, saying it was because of smaller number to sell, not low appeal. There are more profitable markets elsewhere for Insight, Honda said.