Honda: decline in global auto sales ebbs

Honda Motor Co. said Tuesday the decline in global automotive sales has ebbed, but an immediate recovery in the major markets of the U.S., Japan and Europe is unlikely.

The Japanese auto maker expects industry sales in its native country to remain flat at about 4.6 million vehicles in 2010 despite expectations that government incentives to boost new vehicle purchases will continue until September, Koichi Kondo, Honda's executive vice president and representative director, said on the sidelines of the New Delhi Auto Expo.

"The global automotive market has bottomed out, but developed countries like the U.S., Japan and Europe still seem to need more time to recover because there are not clear signs yet," Mr. Kondo said. "...And one concern of next year's automotive market is globally governments offered some incentives and most of the countries have finished their incentives at the end of last year."

"We are wondering how this situation about the incentives is going on. So, we need more time to foresee this year's market situation."

Mr. Kondo said the Chinese automobile market is expected to grow about 10%, half of the growth achieved in 2009 when sales touched 13 million vehicles.

"The China growth will depend on government incentives," he said.

Honda plans to add 100,000 units annual production capacity at its Chinese joint venture company--Dongfeng Honda--by 2011. This will be increased by an additional 200,000 vehicles at a later date, Mr. Kondo said. Dongfeng Honda has a current annual production capacity of 230,000 vehicles.

Honda and China's Dongfeng Motor Corp. own equal stakes in the joint venture company.