Japan’s second-biggest automaker
Honda (
) plans to enhance its production level in the U.S. from September. The company will boost output by operating its plants in Ohio and Alabama during Saturdays.
The recently launched “Cash for Clunkers" program and signs of gradual recovery no doubt fueled Honda’s plan. “Cash for Clunkers" is a cash incentive program enabling consumers to swap their fuel-inefficient vehicles for efficient ones for up to $4,500.
Several automakers have benefited from the program. Ford Motor ( ) showed a sales gain for July (the first since November 2007), believed to have been driven by the demand for fuel-efficient vehicles. July also proved to be the best month of the year for Honda, as revealed by its narrower fall (17%) in sales.
Honda offers several fuel-efficient vehicles. While its Fit and Civic models clock a commendable 30–31 mpg, both Accord and CRV log about 25 mpg.
Honda also aims to tap the huge potential offered by the global market for hybrid vehicles. Hybrids are predicted to become a smart choice for consumers in the future, as their fuel efficiency generates savings that more than offset the price difference with the non-hybrid ones. Honda intends to increase hybrid sales to 500,000 vehicles per year early in the next decade, which is equivalent to 15% of its current sales volume.
Thus, Honda’s strategy looks perfectly in line with the market.
