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Bloated inventory forcing Honda to cut domestic output

TOKYO -- Honda Motor will curb car production in Japan this month and next in light of repeated recalls that have necessitated improved quality control, and slower than expected sales following April's tax hike.

     Daily production will be scaled back about 20% to some 800 units at its Sayama plant in Saitama Prefecture. The plant, which produces minivans and other vehicles, will idle operations on Fridays.

     Meanwhile, at its Suzuka factory in Mie Prefecture, which makes mainly minivehicles, the operating rate will be lowered to about 80-90% of its current daily capacity of roughly 2,000 units. But output at the state-of-the-art Yorii plant, also in Saitama Prefecture, will be maintained at 1,000 units a day.

     Honda wants to whittle down inventories that began piling up amid the sales slowdown following Japan's consumption tax hike. Honda has been focusing on local production to reduce exports, leaving its domestic output susceptible to ups and downs in domestic sales.

     For instance, at Toyota, which exports about half its domestic output, volumes planned in late August for October through December will be maintained, at 12,500 units a day.

     Honda has issued four separate recalls for its mainstay Fit subcompact over its hybrid driving system. "We'll have an overarching quality checkup," said an official.

     This will delay the release of some vehicles. The carmaker plans to roll out six new models by the fiscal-year end, but will likely be able to release just two or three by the end of this year.

(Nikkei)

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