Made-in-China car sells well in Canada, Honda says

The Globe and Mail (Detroit) - The only Chinese-made car on sale in Canada has been a success so far, Honda Motor Co. Ltd. officials say after importing the Fit subcompact from a Honda plant in China for more than a year.

Fit sales grew to 4,736 in 2012 from 2,835 in 2011 helped by the greater availability of the car from China, Honda Canada Inc. executive vice-president Jerry Chenkin said at the North American International Auto Show in Detroit.

But Honda could sell more of the cars in Canada if it could get them, Mr. Chenkin said. "Sales of the Fit have always been determined by the supply. That situation persists today. We need more and we're trying to get more."

More supply should become available when a new plant comes on stream in Mexico in 2014. That plant will supply the U.S. market.

As a subcompact, the Fit has low profit margins, so exporting it to the U.S. market from Japan became prohibitive during the yen's rise to about ¥80 to the U.S. dollar last year. The U.S. dollar now buys about ¥88.

The Mexico factory was built to make the Fit for North America, Takanobu Ito, chief executive officer of Honda, told a small group of reporters at the Detroit show. "I really think this will be an accelerant to our business growth in North America."

It's not clear, he said, whether Fits built in Mexico will be shipped to Canada to supplement or replace those from Japan.

The Mexico plant will help boost the ratio of vehicles Honda makes in North America

versus those it sells here to more than 90 per cent, Mr. Ito said.

"In terms of U.S. production, we're at full production to try and answer the demands of our customers in Canada," he said. "Canada is in a similar position."

Honda will also assemble in Mexico a small crossover vehicle it introduced Monday at the show.

The auto maker assembles Civic compact cars and CR-V crossovers at a plant in Alliston, Ont.

Honda is targeting record sales of more than 1.55 million

vehicles in the U.S. market this year.

Honda Canada is projecting a small sales increase, but not large enough to match the record it hit in 2008, Mr. Chenkin said.