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Honda expects good fortunes to extend to 2004

Honda Motor Co, Japan's second-largest automaker, forecast its global auto sales will rise 10 percent to a record next year, partly propelled by demand for a new minivan and a revamped version of its Legend sedan.

Honda will probably sell 3.2 million vehicles worldwide next year, up from an estimated 2.91 million this year, President Takeo Fukui said at the company's end-of-year press briefing in Tokyo.

Auto sales in the US may rise about 4 percent to 1.4 million, from an expected 1.35 million this year.

Tokyo-based Honda is relying on success in North America, source of as much as 90 percent of its operating profit, for a third year of record profit.

Honda's shares are little changed this year, compared with a 54 percent gain at Ford Motor Co, on concern it may fail to reach that target because of a 10 percent rally in the yen and sliding domestic sales.

"Honda's car sales will continue to be strong, with a huge contribution from North America next year," said Norihito Kanai, who helps manage the equivalent of US$2.5 billion at Meiji Dresdner Asset Management Co.

"We hope to see their Japan sales rising with new models in 2004," he said.

The maker of Accord sedans and Odyssey minivans will probably sell 800,000 vehicles in its home market next year, 8 percent more than this year's estimate of 740,000, Fukui said. Honda will release at least two new models at home next year, one of which will be a minivan based on its ASM concept car, and another multi-passenger vehicle in the summer "featuring a complete new packaging." It will also revamp its Legend sedan.

"The Japanese auto market is very severe and competitive, but we do have our target to sell 1 million units in the future going beyond the 800,000 units," Fukui said.

Honda's global auto output will probably rise 7.5 percent to 3.17 million units next year, with a 5.2 percent gain in domestic production to 1.22 million and overseas output increasing 8.9 percent to 1.95 million.

The global and overseas production forecasts are records for Honda, which already sells a bigger percentage of its vehicles outside Japan than any other Japanese automaker.

Once Honda's second assembly line at its Alabama plant starts operation in April, average profitability for light trucks "will come up to a similar level as Accord and Civics, which are most profitable," said Executive Vice President Koichi Amemiya.

The automaker will set up a new, wholly owned subsidiary in Beijing in February to oversee the operation of 11 ventures in China, Fukui said.

The new unit, called Honda Motor China Investment Co, will be capitalized at US$30 million and will hire about 35 people. The company will coordinate Honda's Chinese operations in public relations, corporate communications, and intellectual property management.

The company has been expanding its Guangzhou Honda Automobile Co venture in southern China, which makes Accord cars, Odyssey minivans and Fit Saloons.
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