Honda exported its one-millionth car from the U.S. on Wednesday, which the automaker said should help it overcome a drop in sales stemming from a conflict with China.
Last month Honda announced that overall sales have fallen because exports to China have dropped, but the company said this week that American auto sales are up 39 percent in November over last year. It also hopes that exports to other countries will offset the sales drop in China, such as the launch of the Accord in South Korea this week that led to the one-millionth export.
Honda employs 13,500 people in Ohio, including about 1,475 from Clark and Champaign counties and 1,200 more from the rest of the Miami Valley. It builds transmissions and engines for the Civic at the Anna and Russells Point Plant, while the Accord is built at the Marysville Auto Plant.
The company also unveiled a redesigned 2013 Honda Civic last week as a response to criticism of its 2012 model. Despite that, Honda reports show Civic sales are up 75 percent over last year.
Its major exports include the Civic, as well as the Accord, Crosstour and Odyssey, spokesman Ron Lietzke said.
“There is a reduction in sales in the market in China,” Lietzke said. “Honda did adjust its outlook based on what was happening in China. I don’t think it was a major impact but it did change the outlook a little bit … We export vehicles to a lot of different countries.”
Honda dropped sales projections through March 2013 to 4.1 million vehicles sold, down from an expected 4.3 million. It’s still an improvement over the 3.1 million vehicles Honda sold globally the previous year. That translates to a $122 billion sales forecast for this year.
Despite territorial disputes between Japan and China that have lead to reduced Japanese auto sales there, auto analyst David Cole said American-manufactured cars have become more popular overseas, particularly smaller cars such as some of Honda’s models.
The Civic and the Accord are “huge volume products,” Cole said. “Production in the U.S. plants are really creating an important ability to use this as an export platform in small cars. It’s harder to make and export large vehicles.”
Honda recently began selling its Accords in South Korea, and expects to reach nearly 100,000 Honda and Acura exports this year, not including exports to Canada, according to Honda reports. The company sells cars in 40 countries and has sold more than $22 billion of automobiles overseas since 1987.
Honda was the first Japanese automaker to invest in manufacturing facilities in the U.S. and recently celebrated it’s 30th year of American manufacturing this year. Cole said that marks the U.S. as a good place to do production.
For auto manufacturers, he said, it’s more economical to build in countries that buy the most product. Even if the workforce is cheaper, the transportation costs are much higher.
“There’s a good chance a car like (the Civic or Accord) will also sell in a number of different markets like China and Europe, places they can’t build in because they don’t have the scale of production,” Cole said.
Lietzke confirmed that Honda’s smaller vehicles are in high demand and competitive in the global market place.
“We’re capable here in the U.S. with our operations to produce products that our customers want in other countries,” he said. “Which means we’re meeting other standards in regards to safety and quality.”
An example Lietzke gave is that the Russian and Saudi Arabian markets have higher standards in paint quality than the American consumer, so Honda makes all cars to meet that high standard.
“We meet the needs of their quality standards but it also impacts work here because (the paint jobs) are better than what we’d do to satisfy just this market,” Lietzke said. “Now we have the ability after 30 years of manufacturing to meet needs of people in other parts of the world and can do it competitively.”
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