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Fri, Oct 17, 2008 - Page 10 News List

Honda praises US move to offer loans to US automakers

AP , TOKYO

Honda welcomed the US government’s decision to extend loans to US automakers yesterday, but said the problems of the companies highlighted their slow response to soaring gas prices.

“It is totally proper for the US government to help out US automakers,” Honda chief executive Takeo Fukui told reporters in Tokyo, adding that Honda also relies on the same parts makers in the US.

Last month, US President George W. Bush signed a sprawling spending bill that included US$25 billion in subsidized loans to the troubled US automakers.

General Motors Corp, Ford Motor Co and Chrysler had lobbied for the government loans, which will help them develop a broader lineup of fuel-efficient models.

Honda Motor Co, whose models are reputed for good mileage, has avoided some of the major sales battering that US rivals have taken as gasoline prices soared.

“The times have changed,” Fukui said. “Their response was too slow.”

Fukui said Honda benefited by refraining from expanding into the once lucrative pickup truck sector.

“We didn’t dabble in that, and that worked out well for us,” he said at a Tokyo hotel.

Fukui said Honda sales were holding up despite the gloomy outlook for the industry and he foresaw no major revisions to fiscal year sales forecasts.

Tokyo-based Honda has been nimble in adjusting production to boost output of in-demand models, like the Accord, to keep inventory low and respond to changes in consumer tastes.

While Honda is seeing sales fall in some markets, they are gaining or holding up in others including China and India.

Honda posted year-on-year sales growth through August in the US, but reported a 24 percent drop last month as US sales fell below 1 million vehicles.

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