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Business

Honda taking steps to shore up European ops

The Honda HR-V is slated to debut in Europe.

TOKYO -- Honda Motor is tweaking its operations in Europe in ways intended to strengthen the struggling business.

     The carmaker will broaden its European lineup with automobiles imported from Mexico, boost productivity of a factory in England by building cars for North America there, and move most of its European headquarters staff back to Japan.

     Europe's auto market is beginning to recover, but Japanese automakers find themselves left in the exhaust of such European rivals as Volkswagen. That is particularly true for Honda, which offers a limited range of models there. Its passenger car sales in the 30 countries of Europe dipped 5% in 2014 to 133,000 vehicles, giving it a paltry 1% market share.

     To broaden its lineup and invigorate sales, Honda this summer will begin European sales of the HR-V, a small SUV made at its new factory in Mexico.

     Also slated for release this summer in Europe is the remodeled Jazz subcompact, known in Japan as the Fit. Instead of making the new Jazz at its factory in southern England, Honda will import the car from Japan.

     That will leave Honda's sole European plant with even more idle machinery. So the facility will be used to manufacture a five-door version of the Civic for export to North America starting as early as the summer of 2016. Annual output is projected at 30,000 to 40,000 units.

     The factory in Swindon can roll out 250,000 cars a year, but of its two lines, one with a capacity of 100,000 vehicles has been idle since the spring of 2014 because of slumping sales. Building the Civic hatchback for North America will boost the plant's operating rate.

     With the exception of the fiscal year that ended in March 2013, Honda's European operations have been consistently in the red since the year ending March 2010.

     To reduce the costs of posting personnel abroad, Honda will repatriate most of the staff of Honda Motor Europe, the base in England now in charge of overall operations in the region. A handful of people will stay at the office in Berkshire, but HME leader Toshiaki Mikoshiba and most others will return to Japan to develop strategy in closer contact with the head office.

(Nikkei)

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