Tag Archives: Honda Motor

Business, Finance, Occupation & Industry

Want to Buy a Ford Fusion This Summer? Good Luck!

Leave a comment

By Adam Levine-Weinberg, The Motley Fool

Filed under:

Ford continues to knock the ball out of the park with its second-generation Ford Fusion. The new Fusion, which debuted to great fanfare last fall, has quickly become one of Ford’s best-selling models. I have been bullish on the new Fusion’s potential since last August, and the early sales results have still outperformed my expectations.

The 2013 Ford Fusion (courtesy of Ford)

However, sales gains may have peaked for the time being, due to capacity constraints, which were highlighted Tuesday morning by Ford’s management on the company’s sales conference call. Fusion inventories are already very tight in many parts of the country, and are likely to get even slimmer during the spring and summer car-buying season.

From an investor standpoint, excess demand is a high-class problem to have. Lean inventories will allow Ford to sell as many Fusions as it can make without resorting to discounts. Furthermore, dealers may be able to cross-sell other Ford models to customers who come into dealerships thinking about purchasing a Fusion. Lastly, Ford will bring a second factory online to produce the Fusion beginning this summer, which will provide a foundation for further sales gains.

Increasing sales
Last month, I pointed out that Ford was gaining on competitors in the large and growing midsize car segment in 2013. The U.S. midsize segment has been dominated by the big three Japanese automakers — Toyota Motor , Honda Motor , and Nissan — for many years. However, the Fusion outsold the Nissan Altima in both January and February, catapulting Ford into third place.

In March, Fusion sales rose once again, setting an all-time monthly record with 30,284 sales. If not for the capacity constraints mentioned above, Ford could have sold more vehicles. Supply was very tight in big markets like California and south Florida, where Fusions sat on dealer lots for an average of about 15 days (the industry norm is approximately 60 days). Fusion production at Ford’s Flat Rock plant is expected to begin around July, so Ford should be able to meet full demand by sometime this fall. Until then, supply is likely to be tight, which means there won’t be many discounts, and selection will be limited for car buyers.

Be careful
While the Fusion’s popularity is great news for Ford shareholders, there are still reasons to be cautious about the stock. Despite Fusion‘s strong showing, Ford fell back into fourth place in the midsize segment in March, as Nissan Altima sales rebounded to 37763 units. (In fact, Nissan jumped all the way to first in the midsize segment last month, edging out longtime segment leader Toyota Camry by 100 units.) Nissan’s gains were probably due to higher incentive spending; according to TrueCar, Nissan’s incentives averaged 9.9% of the average transaction price last month, up sequentially from 9.6% in February. By contrast, incentive spending fell sequentially from 8.8% of ATPs in February to …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Has Japan Created a Day of Reckoning for U.S. Automakers?

Leave a comment

By Adam Levine-Weinberg, The Motley Fool

US Dollar to Japanese Yen Exchange Rate Chart

Filed under:

In the past six months, the yen has plunged in value relative to the dollar. Whereas $1 was worth less than 80 yen in late 2011 and throughout most of 2012, the exchange rate has moved by more than 20% since October, so that $1 approximately equals 94 yen.

U.S. Dollar to Japanese Yen Exchange Rate data by YCharts

This devaluation has come about primarily because of a change in government in Japan. Shinzo Abe’s LDP came to power in the December parliamentary elections, and Abe promised to restart economic growth by fighting deflation. Abe has since appointed a new governor of the Bank of Japan, Haruhiko Kuroda, who has promised a more dovish monetary policy. The shifting political winds have led to sharp declines for the yen against every other major currency.

A cheaper yen is a boon to Japanese exporters, such as automakers Toyota Motor and Honda Motor . By contrast, American automakers, such as Ford and General Motors could be at risk as their Japanese rivals gain a cost advantage. However, the ultimate impact of the yen’s move on these stocks depends on the strategies adopted by the Japanese automakers.

A white knight?
Japanese automakers have been complaining for some time about cost inflation caused by the strong yen. All of the major Japanese automakers have been moving production overseas in recent years to counteract the strong yen. That said, yen exposure is still high. For example, Toyota — by far the largest of the Japanese automakers — built roughly 3.5 million vehicles in Japan in 2012, more than half of which were exported. As recently as last summer, The Wall Street Journal reported that Japanese automakers were planning to move even more production overseas because they could not profitably export vehicles built in Japan.

The yen’s precipitous decline has made this point moot: the dollar cost of producing a car in Japan (with 100% Japanese components) is now nearly 20% lower than it was last summer. This is good news for all of the Japanese automakers. With lower costs, they can either pocket more profit per vehicle, or they can cut prices in order to gain market share in key regions like the U.S., while boosting export production to meet the additional demand.

However, this does not mean you should go running to buy Toyota today. While yen devaluation lowers production costs for vehicles built in Japan, it also lowers the dollar value of earnings from within Japan. This affects all of the Japanese automakers, but especially Toyota, which has captured nearly half of the Japanese market in recent years.

Moreover, the expiration of certain government tax credits in Japan in late 2012 led to several months of declining auto sales there. Lower sales volumes in Japan could cut significantly into profit for Toyota, Honda, Nissan, and other rivals. Toyota, as the dominant player in the Japanese market, would bear the brunt of …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Honda Recalling Nearly 250,000 Vehicles

Leave a comment

By John Divine, The Motley Fool

Filed under:

Despite no reported crashes or injuries, Honda Motor has issued recalls for about 250,000 vehicles across the globe in order to fix a potential problem with the braking system in certain models.

The majority of the affected vehicles — about 183,000 of them — are in the U.S., though nearly 60,000 will be recalled in Japan, Reuters reports. Honda models in five other countries have also been called back for retooling. The American recalls include the 2005 Honda Pilot, 2005-2006 Acura MDX, and the 2005 Acura RL.

According to the company, the potential problem involves an electrical capacitor on the Vehicle Stability Assist control unit that may have been damaged during manufacture. This could cause the VSA system to malfunction and apply a small amount of brake force for a fraction of a second, without any input by the driver. Or, the amount of brake force applied could exceed the driver’s intended input.

It isn’t the first time this year that Honda has realized potential safety issues in vehicles already on the road. The Honda Pilot in particular has undergone a tough year: In January the company recalled nearly 750,000 newer Honda Pilots and Honda Odysseys due to manufacturing issues with the driver’s side airbag.

The Japan-based company is struggling to remain competitive with other automotive companies all around the world. Between the 2008 fiscal year and the 2012 fiscal year, the company saw its revenues slide more than 33%.

The article Honda Recalling Nearly 250,000 Vehicles originally appeared on Fool.com.

Fool contributor John Divine has no position in any stocks mentioned. 
You can follow him on Twitter

@divinebizkid

and on Motley Fool CAPS

@TMFDivine

.
The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

(function(c,a){window.mixpanel=a;var b,d,h,e;b=c.createElement(“script”);
b.type=”text/javascript”;b.async=!0;b.src=(“https:”===c.location.protocol?”https:”:”http:”)+
‘//cdn.mxpnl.com/libs/mixpanel-2.2.min.js’;d=c.getElementsByTagName(“script”)[0];
d.parentNode.insertBefore(b,d);a._i=[];a.init=function(b,c,f){function d(a,b){
var c=b.split(“.”);2==c.length&&(a=a[c[0]],b=c[1]);a[b]=function(){a.push([b].concat(
Array.prototype.slice.call(arguments,0)))}}var g=a;”undefined”!==typeof f?g=a[f]=[]:
f=”mixpanel”;g.people=g.people||[];h=[‘disable’,’track’,’track_pageview’,’track_links’,
‘track_forms’,’register’,’register_once’,’unregister’,’identify’,’alias’,’name_tag’,
‘set_config’,’people.set’,’people.increment’];for(e=0;e<h.length;e++)d(g,h[e]);
a._i.push([b,c,f])};a.__SV=1.2;})(document,window.mixpanel||[]);
mixpanel.init("9659875b92ba8fa639ba476aedbb73b9");

function addEvent(obj, evType, fn, useCapture){
if (obj.addEventListener){
obj.addEventListener(evType, fn, useCapture);
return true;
…read more
Source: FULL ARTICLE at DailyFinance