http://www.iht.com/articles/2009/02/23/business/auto.1-435837.php
Honda replaces president amid sales slump
By Hiroko Tabuchi
International Herald Tribune, February 23, 2009
TOKYO: The head of Honda Motor, the second-largest automaker in Japan, will step down in June, making way for younger leadership amid a deepening slump in global car sales.
Takanobu Ito, 55, a star engineer with experience in the U.S. market, will replace the current president, Takeo Fukui, as part of a wider management reshuffle, Honda announced Monday. Fukui, 64, will become a Honda adviser.
Like its counterparts in the United States, Honda has been battered by a drop in sales as recession takes hold in its major markets. Honda saw profit plunge 90 percent in the last three months of 2008 from the same period a year earlier, and it expects its first loss in decades this quarter as car and motorbike sales stutter worldwide. A strengthening yen is also eroding profits back home.
Still, Honda has fared better than its rivals in the United States and Japan, thanks to its focus on smaller, cheaper cars like the Accord sedan.
Honda has also moved quickly to address the global downturn: In December, it pulled the plug on its popular Formula 1 racing team to channel funds to next-generation cars, and it has cut production in Japan and North America.
The carmaker expects to eke out ¥80 billion, or $843 million, in profit for the fiscal year ending March 31. Detroit automakers are losing money, while Honda's larger Japanese rival, Toyota Motor, expects an operating loss of ¥450 billion this fiscal year, its first loss in 75 years.
Ito stressed, however, that Honda was in crisis mode.
"The car industry is in the midst of its worst crisis in 100 years, and Honda faces tough decisions that will dictate whether it survives and grows," he said at a news conference.
"My hope is that the market starts to show signs of recovery this fiscal year, but that would be dangerous to assume," Ito said. "I don't like to use the word 'restructuring,' but there is a great need to further concentrate our resources."
One focus is Honda's hybrid lineup. This month, the company rolled out a new, low-priced Insight hybrid car, which sells for about 20 percent less than Toyota's popular Prius hybrid. Honda plans to introduce the Insight in Europe and the United States in the next two months.
Orders for the Insight have topped 10,000 units in just 10 days since the release, twice its target for the entire month, Honda said.
Ito will also head Honda R&D, the carmaker's research arm, which will allow a faster transfer of new technology from the laboratory to the production line.
"To survive the next one to two years, speed will be key," said Fukui, the outgoing president. Ito's appointment is not expected to bring about a break in Honda's overall management strategy of focusing on low-cost cars.
During his tenure, Fukui led Honda's push into the critical U.S. market. Under Fukui, Honda also made a foray into small jets and developed the Insight hybrid.
Ito, who joined Honda in 1978, built a career developing auto bodies. He served as vice president at Honda R&D Americas, where he brought Honda's first sport utility vehicle to market under the Acura brand.
Honda replaces president amid sales slump
By Hiroko Tabuchi
International Herald Tribune, February 23, 2009
TOKYO: The head of Honda Motor, the second-largest automaker in Japan, will step down in June, making way for younger leadership amid a deepening slump in global car sales.
Takanobu Ito, 55, a star engineer with experience in the U.S. market, will replace the current president, Takeo Fukui, as part of a wider management reshuffle, Honda announced Monday. Fukui, 64, will become a Honda adviser.
Like its counterparts in the United States, Honda has been battered by a drop in sales as recession takes hold in its major markets. Honda saw profit plunge 90 percent in the last three months of 2008 from the same period a year earlier, and it expects its first loss in decades this quarter as car and motorbike sales stutter worldwide. A strengthening yen is also eroding profits back home.
Still, Honda has fared better than its rivals in the United States and Japan, thanks to its focus on smaller, cheaper cars like the Accord sedan.
Honda has also moved quickly to address the global downturn: In December, it pulled the plug on its popular Formula 1 racing team to channel funds to next-generation cars, and it has cut production in Japan and North America.
The carmaker expects to eke out ¥80 billion, or $843 million, in profit for the fiscal year ending March 31. Detroit automakers are losing money, while Honda's larger Japanese rival, Toyota Motor, expects an operating loss of ¥450 billion this fiscal year, its first loss in 75 years.
Ito stressed, however, that Honda was in crisis mode.
"The car industry is in the midst of its worst crisis in 100 years, and Honda faces tough decisions that will dictate whether it survives and grows," he said at a news conference.
"My hope is that the market starts to show signs of recovery this fiscal year, but that would be dangerous to assume," Ito said. "I don't like to use the word 'restructuring,' but there is a great need to further concentrate our resources."
One focus is Honda's hybrid lineup. This month, the company rolled out a new, low-priced Insight hybrid car, which sells for about 20 percent less than Toyota's popular Prius hybrid. Honda plans to introduce the Insight in Europe and the United States in the next two months.
Orders for the Insight have topped 10,000 units in just 10 days since the release, twice its target for the entire month, Honda said.
Ito will also head Honda R&D, the carmaker's research arm, which will allow a faster transfer of new technology from the laboratory to the production line.
"To survive the next one to two years, speed will be key," said Fukui, the outgoing president. Ito's appointment is not expected to bring about a break in Honda's overall management strategy of focusing on low-cost cars.
During his tenure, Fukui led Honda's push into the critical U.S. market. Under Fukui, Honda also made a foray into small jets and developed the Insight hybrid.
Ito, who joined Honda in 1978, built a career developing auto bodies. He served as vice president at Honda R&D Americas, where he brought Honda's first sport utility vehicle to market under the Acura brand.
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