Honda sees global auto sales rising 10% on new models
By Kae Inoue
c.2003 Bloomberg News

Honda will probably sell 3.2 million vehicles worldwide next year, up from an estimated 2.91 million in 2003, President Takeo Fukui said at the company's end-of-year press briefing in Tokyo. Sales in the U.S. alone will rise about 4 percent to 1.4 million units from an estimated 1.35 million this year.

The maker of Acura MDX sport-utility vehicles is relying on success in North America, where it gets as much as 90 percent of its operating profit, to generate a third year of record profit. The company's shares are little changed this year on investors' concern a 10 percent rally in the yen and sliding domestic sales may threaten that target.

''Honda's car sales will continue to be strong with a huge contribution from North America next year,'' said Norihito Kanai, who helps manage the equivalent of $2.5 billion at Meiji Dresdner Asset Management Co. ''We hope to see their Japan sales rising with new models in 2004.''

The automaker will probably sell 800,000 vehicles in its home market next year, 8 percent more than the 2003 estimate of 740,000, Fukui said. Honda will release two new models at home next year, one of which will be a minivan based on its ASM concept car, and will also revamp its Legend sedan.

Honda's domestic car sales fell 40 percent to 32,021 last month, an 11 consecutive monthly drop, in part because models such as the Odyssey and Stream minivans and Fit compact reached the end of their model years.

Honda shares rose as much as 1.6 percent to 4,500 yen, and were traded at 4,450 yen as of 12:35 p.m. in Tokyo.

Production forecasts

Honda's global auto output will probably rise 7.5 percent to 3.17 million units next year, with a 5.2 percent gain in domestic production to 1.22 million. Output overseas will probably increase 8.9 percent to 1.95 million. Both global and overseas production forecasts are records.

The automaker said European car sales in 2003 will probably total about 215,000 units, beating its earlier forecast of 200,000 by 7.5 percent. The figure will probably rise a further 2.3 percent next year to 220,000, Honda said.

Overall car demand in the U.S. next year will be at between 16.5 million and 16.6 million units, while the European market will total about 16 million, the automaker said. Demand in Japan in 2003 will be a little ''stronger'' than the 2002 figure of 5.79 million units, Managing Director Satoshi Dobashi said, without giving a 2004 forecast.

Honda said its auto exports from Japan will probably drop 1.1 percent to 460,000 units next year.

Two-wheeler sales

Worldwide sales of Honda's motorcycles and all-terrain vehicles will rise 14 percent to a record 10.4 million in 2004, the company said. Sales of power products will rise about 8 percent to another record of 5.4 million units.

The automaker will set up a new, wholly owned subsidiary in Beijing in February to oversee the operation of 11 ventures in China, Fukui said. The new unit, called Honda Motor China Investment Co., will be capitalized at $30 million.

The company has been expanding its Guangzhou Honda Automobile Co. venture in southern China, which makes Accord cars, Odyssey minivans and Fit Saloons. Honda is trying to grab more of the world's most populous market, as rising incomes spur demand and auto sales are forecast to triple to 5.8 million buy 2010, according to McKinsey & Co.

Dongfeng venture

Honda and Dongfeng Motor Corp. said in August they will make as many as 30,000 CR-V sport-utility vehicles a year at a new venture in the central city of Wuhan as the Japanese company adds more vehicle models in China.

Honda said it has increased the local content of its China-made vehicles to 80 percent from 40 percent two years ago.

The company will release a new motorcycle in China in 2004, developed at its local research unit, Honda said.

Honda forecast vehicle sales in Thailand will rise 13 percent to 78,000 units next year, close to the 1996 record annual increase because rising economic growth is encouraging consumers to buy new cars, the company's managing director Satoshi Toshida said at a press conference in Bangkok.

''The intense level of Honda's manufacturing operations in Thailand will continue to reflect very positively on our export volumes,'' Toshida said. ''As long as the economic situation continues to improve, there's a huge potential for growth in this area, not only in Thailand, but more applies to Indonesia and also the Philippines.

Motorcycle sales in Thailand, where Honda has a 71 percent market share, may rise to 1.30 million units next year from 1.27 million in 2003.

The company expects revenue from exports to the 10 member states of the Association of Southeast Asian Nations (Asean) to rise a quarter to 47.5 billion baht ($1.2 billion) next year. Motorcycle sales to the Asean member countries may increase 8.6 percent to 3.8 million, and car sales may rise 23 percent to 160,000, Toshida said.

Asean comprises Thailand, Malaysia, Singapore, the Philippines, Indonesia, Vietnam, Cambodia, Brunei, Myanmar and Laos.