Honda Plans to Double Global Auto Sales in 5 Years

First Up 09/21/12

September 21, 2012

Honda Plans to Double Global Auto Sales in 5 Years
According to Automotive News, Honda Motor Co. plans to double its global vehicle sales to 6 million in five years, driven by demand for small cars such as the Fit/Jazz subcompact and new models in emerging markets including China and India. Honda aims to sell 3 million cars in Japan, the United States, Europe, and other developed markets combined, up from about 2 million it sold in the year ended March, and double sales to 3 million cars in emerging markets including India and China, Honda CEO Takanobu Ito told reporters today. Last fiscal year, Honda's global sales were 3.1 million. The Fit, also known as the Jazz in some markets, subcompact car and its derivatives, as well as the Brio small car, will be at the core of the company's product lineup so that Honda can reach its sales target, Ito said. "This is quite a big figure for us and there were debates over whether we should make it public, but unless we set a goal and work to figure out how we can achieve it, our business operations won't be specific," he told a news conference. Read more about Honda’s intentions to double its global auto sales in five years here.

Daimler Cuts Profit Target for Mercedes-Benz
The global economic slowdown is ensnaring two of Germany's luxury auto makers with Daimler AG on Thursday warning that its Mercedes-Benz division would miss its profit target for the year and Porsche preparing for weaker demand next year. Daimler, owner of the world's third-largest luxury car brand by sales, blamed increasingly tough competition in China and falling demand in Europe for the expected shortfall. According to The Wall Street Journal, its shares fell 2 percent in Frankfurt trading on Thursday. Until now it has mainly been mass-market manufacturers, such as General Motors’ European Opel unit, PSA Peugeot Citroën SA, and Fiat SpA, that have fallen victim to Europe's slack economic growth. Their cars appeal to more price-sensitive buyers and generate most sales in Europe, where the euro-zone sovereign debt crisis has sapped demand for new cars. Mercedes-Benz lagged its rivals in China so far this year mainly because of production related downtime from a changeover in its B-Class model and internal issues within its local dealership network. In contrast, Mercedes-Benz and other luxury brands have notched new sales records in the first eight months of the year on higher demand in Asia and the U.S. Read more about Mercedes-Benz lowered profits here.

CAW, GM Reach Tentative Deal
The Canadian Auto Workers (CAW) late Thursday reached a four-year tentative agreement with General Motors Co., a contract that matched the pattern set in an agreement with Ford Motor Co. earlier this week, reports The Detroit News. It paves the way for a possible deal with Chrysler Group LLC. "We met the entire Ford pattern," CAW President Ken Lewenza said at a briefing in Toronto on Thursday night. After nearly three days of negotiations following an extension of talks Monday, the tentative agreement not only keeps jobs and products in Canada, but also includes millions in investments. The CAW said GM would create or maintain 1,750 jobs during the life of the contract, and will spend $675 million on programs at its Oshawa Assembly Plant and St. Catharines Powertrain Plant. The CAW said the GM agreement, if approved, would have the effect of leaving no seniority workers on layoff for the first time in more than 20 years. Lewenza said GM has agreed to add a third shift on the flex line at its Oshawa assembly plant early next year, which will create or maintain 900 jobs. Read more about an agreement between GM and the CAW here.

New Car Ads Play Up Relationships, Play Down Hard Sell
In a break from hawking horsepower and leather upholstery, automakers are now trying to show customers they want to be their friend as well, reports USA Today. Honda and and Volkswagen both are unveiling emotional ad campaigns this week that emphasize relationships – how well they know you, their owners, and your needs and foibles. Both play down the business at hand, selling you a new car. Honda's campaign is themed "It all starts with you." It aims to tug heartstrings as it depicts consumers going through everyday life and making mistakes along the way. Volkswagen is unleashing a TV and social media package called "Why VW," with the tagline "It's not the miles, it's how you live them.” The campaign is for the brand, rather than individual models, and the opening ad shows people, from babies to old folks, laughing and smiling. Of the two campaigns, Honda's will probably harder to miss, particularly on TV. Honda is mounting the biggest ad blitz in its history in the U.S. to launch the new 2013 Accord flagship sedan. Click here to watch one of the ads titled, “We Know You.” For more on Honda and VW’s new advertising campaigns, click here.

Auto Industry Battling Silicon Valley for Best College Engineering Talent
The auto industry is back on campus and hiring a different breed of engineer – those who can help invent the next generation of complex software that pushes the envelope on mpg, clean emissions, and crash avoidance technologies, reports The Detroit Free Press. The Detroit Three, Asian, and European automakers and suppliers find themselves in a new recruitment arena battling Amazon, Apple, Facebook, SpaceX, and others for the top software engineering talent. For the auto industry, recruiting can be challenging because many students are drawn to an entrepreneurial environment in Silicon Valley. Others are skeptical of the auto industry's boom-and-bust cycles. They've been scarred because parents, friends, or neighbors lost jobs in the 2008-09 crisis, career advisers said. Pitching the auto industry to students can be hard. Several students said they want to know that their work is going to make a difference. They recoil at the sight of a top-down culture and hate bureaucracy. Auto companies have responded by tweaking their co-op and internship programs. The auto companies say those programs give them an edge in the recruiting process because the programs expose students to opportunities and undercut their previous assumptions. Click here for more on automaker attempts to hire today’s college graduates.

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