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Wednesday, June 25, 2008

Honda Motor Company observes increased sales amidst economic slowdown and rising fuel price

In the middle of sub-prime economic crisis and high fuel price in the USA, Japan’s second largest auto maker Honda Motor Company Limited (TYO: 7267) is observing a consistent rise in its car sales. This is truly a big achievement for the company. In an email to the analysts, the company said that the company’s US sales in the first 20 days of June 2008 was higher than last year. Thanks to its latest models of fuel efficient small vehicles.

The email said that Honda’s total sales in the USA rose by 16% in the first 20 days of June. However, Chris Martin, Honda spokesperson could not confirm the email. Honda is among the top five automakers that has observed increased sales in the USA this year. The $4 per gallon gasoline has forced consumers to buy fuel efficient vehicles. Like other USA automakers, Honda does not depend heavily on large vehicle sales. Truck sales makes up less than 40% of its total vehicle sales. The Sydney Morning Herald reports:

''Honda may raise its profit forecast at the half-year point,'' said Takashi Aoki, who helps manage about 130 billion yen at Mizuho Asset Management. ''It may also increase production capacity for the Civic and Accord.''

Through May, Honda's US sales gained 4.8%, compared with an industry decline of 8.4%, according to Autodata. Last month the Civic was the top-selling vehicle in the US, besting Toyota's Corolla and Camry sedans.

The email further says that Honda civic, Honda Accord and Honda Fit are the top selling models of the company. However, sales of the light truck models are down due to fuel crisis and economic slowdown. The car sales went up by 37%.

According to Detroit based Honda spokesman, Chuck Schifsky, the demand of Honda Civic is so high that the company is facing a very tough time to meet the demands.

Related articles:
Bloomberg

Sydney Morning Herald

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