United States Honda dealerships are receiving fewer vehicles than required due to a decrease of vehicle sales.
Honda has started to slow it’s shipments of vehicles in order to minimize the impact of decreased sales on its balance sheet.
The cost effectiveness of producing vehicles in Japan to then ship them over to the U.S. is no longer a profitable plan. Honda is planning to eventually produce more vehicles and buy more parts in North America.
However, Honda already relies on exports from Japan less than other rival car companies, and builds almost 85 percent of their vehicles in the U.S.
Automotive News reported Ike saying, "Under the current exchange rate of 80 yen per dollar, our export business doesn't make any profit, definitely, the absolute number of exports to the United States will be decreasing."
Nissan plans to halve the value of car components and the number of vehicles it brings from Japan as early 2014, while Toyota told Automotive News that it wants to build hybrids with locally sourced components in North America by 2015.
Honda is currently selling its exports to U.S. dealerships at a loss, but continues to do so to keep segments covered and retain customers.
Last year, due a shortage of supply, Honda did not have enough cars to sell in North America, and Ike told Automotive News that, “we (Honda) need to keep our customer base, exports of money-losers will continue just for the sake of our dealers. At least they have something to sell.”
Honda has continued to sell Acura’s and Hybrids in the U.S. despite a significant loss. The 2013 Acura ILX was originally planned to be built in Honda's Sayama plant in Japan but has since been built in Greensburg, Ind.
Honda to slow car exports to the U.S. - Detroit Automotive | Examiner.com