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Honda exec says US market near capacity, could hurt subprime buyers

Is there a point in the US auto industry where companies should start considering the welfare of their customers ahead of selling more cars? American Honda Executive Vice President of Sales John Mendel thinks that level exists, and we may be getting very close to it.
According to Automotive News, Mendel believes that finding more customers in the market could require pursuing subprime buyers and offering longer-term loans. However, he refuses to use those tactics. While selling models this way can improve things briefly, the strategies hurt resale prices and lower vehicle profits over time. The company won't do "stupid things in the short-term that damage the person who bought yesterday," he said to Automotive News. "It's a very, very short-term tactic especially in the subprime area."
American Honda, which combines the Acura and Honda brands, has seen market share decline from 9.7 percent to 9.1 percent through July 2014, according to Automotive News, and Autoblog's By the Numbers stats showed it posted falling sales in five of the seven months with data this year. Though, Mendel claims that was partially because the company focused on retail sales over fleets. The delays of the launches for the Honda Fit and Acura TLX likely didn't help either.

Honda launches new Fit in Japan, has big expectations for North America

Honda has officially launched the Fit sub-compact in its home market, ahead of its eventual arrival in North America. The third-generation Fit is wildly important for Honda, with the company's president, Takanobu Ito, saying, "This is the most important model."
The third-generation Fit is a ground-up reworking of the car that we've come to know. It will pioneer Honda's new design language, Exciting H Design (seriously) and will also be the very first Fit to be manufactured in North America. Thanks to a Mexican factory that is scheduled to open in the spring of 2014, Honda will be able to produce 200,000 Fits for the North American market in North America, saving the brand a huge amount of cash.
As for that Exciting H Design, it's meant to be sleeker and more modern, according to Automotive News. It's not bad looking, but the overall design is far less important than what's under that hood. The vehicle you see above is a Fit RS, which has quite a resemblance to the rumored Fit Mugen. There's not a lot of detail on this model, but based on looks alone, we certainly hope it'll be coming to the North American market - it'd make a great Fit Sport. A hybrid variant will also come to the US market, and that car is returning impressive numbers on the Japanese cycle: 86 miles per gallon so far, thanks to the combination of an 1.5-liter, Atkinson-cycle, four-cylinder engine and a seven-speed, dual-clutch transmission. That's a 35-percent improvement over the current, JDM Fit Hybrid.

Honda profit targets tumble in wake of Takata scandal

Takata's massive airbag inflator recall will likely do some damage to Honda's bottom line this year, according to the Japanese automaker's latest forecasts. The company will allocate 50 billion yen ($425 million) to fulfill costs related to the safety campaigns, Reuters indicates. The decision will reduce estimated operating profit by about 6.5 percent to 720 billion yen ($6.1 billion US) for the fiscal year ending March 31. In addition to lower profits, Honda also cut back its sales estimate for the year to 4.45 million vehicles from the previous 4.62 million, according to Reuters. This was largely due to lower-than-expected demand in Japan. "We are not seeing a big impact on sales in North America from the airbag issue," company vice president Tetsuo Iwamura (pictured above) told Reuters. The decreased forecasts come at the same time as the possibility of another death in a Honda vehicle from the Takata parts. According to Automotive News, a man in Florida died in a crash in his 2002 Accord, but investigators have not yet determined whether the inflator was the cause. However, the vehicle was included in a 2011 recall for the part and was not repaired. The family intends to file a lawsuit alleging the inflator ruptured, spraying metal shrapnel into the driver's neck. Reportedly, the owner was never notified of the recall. While the Takata inflator recall is affecting many companies with alleged links to at least five deaths and 139 injuries worldwide, Honda has it among the worst. Including vehicles covered under the previous regional repair campaign for the issue, the automaker needs to repair roughly 5.4 million vehicles just in the US. Honda has taken action by employing suppliers other than Takata to supply some of its replacement parts for the recall. The business is also reportedly switching airbag suppliers for the next-gen Accord and possibly the 2016 CR-V and Odyssey.