Honda Motor Co is taking steps to raise output in Japan in preparation for a likely uptick in demand if a bill to offer consumers cash to replace old cars becomes law, its chief financial officer said on Wednesday. Japan's parliament is deliberating legislation to encourage consumers to ditch cars that are more than 13 years old in favour of fuel-efficient models with a 250,000 yen ($2,500) reward, and is widely expected to pass the bill in the next month or so.
Like most of its rivals, Honda did not include the extra demand into its domestic sales forecast of 555,000 units in the year to March 2010, but Chief Financial Officer Yoichi Hojo said preparations were already underway to lift production. "We're in the process of finding out what we need to do in terms of people and components to make a production expansion possible," Hojo told Reuters in an interview. The auto industry lobby has forecast a sales boost of about 690,000 vehicles this year from the incentive, of which Honda reckons its share to be around 70,000 to 100,000 units.
Honda is also looking to slightly boost production of the new Insight hybrid due to robust orders in Japan so far, Hojo said. The car, which became the first hybrid model to top the best-sellers' list in Japan last month, was selling roughly in line with plans in the United States, Hojo said.
While overall demand in the United States was showing no signs of recovery yet, Hojo said there had been an improvement in credit availability for consumers and used-car prices were bottoming out. Underscoring the further easing of the credit crunch, Hojo said Honda's US finance unit was planning to launch $1.5 billion in asset-backed securities in the April-June quarter. American Honda Finance is also negotiating a loan of 100 billion yen with the state-backed Japan Bank for International Co-operation, he said.
Comments
Comments are closed.