Japanese automakers are shuffling their US product lines and resorting to larger imports of popular models there as they scramble to meet booming demand for SUVs and trucks, a media report said.
Honda said it will begin producing – from early next year – the Acura MDX SUV in East Liberty, Ohio, adding to production at Alabama which also makes the Pilot SUV, Ridgeline pick-up truck and Odyssey minivan, Reuters reported.
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Honda, Toyota and Nissan Motor are all trying to maximise production efficiency at their North American plants to squeeze out more SUVs, but Toyota and Nissan have been importing a large number of SUV models to make up for the production shortfall, and Honda may do the same.
"It takes time for manufacturing to catch up to these shifts because automakers are committing to changing their portfolio. It's not something you can do quickly," Rebecca Lindland, senior analyst for automotive research company Kelley Blue Book, told the news agency.
Imports allow car makers to sell more cars in a region without raising local production capacity, but they also can increase foreign exchange risks, Reuters noted.
Historically low US petrol prices and cost-conscious consumers seeking multi-tasking vehicles have boosted sales of SUVs, particularly smaller crossover models, and trucks, reducing demand for traditional passenger cars.
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By GlobalDataCurrently, 59% of all new vehicles sold in the U.S. market are light trucks, versus 41% passenger cars, compared with 55% and 45%, respectively, a year ago, according to Autodata figures cited by Reuters.
In contrast, the balance of US vehicle sales at each of Japan's top three automakers is roughly even, suggesting that while they are producing more vehicles, the model mix of their sales is lagging market trends.
Honda is expanding production capacity for its CR-V SUV model in the United States. Another option is importing the CR-V, along with the popular Civic, from Japan, a company spokeswoman told Reuters.
"While maintaining our current overall capacity (in North America), we'd like to also consider our production options in Japan … to produce more light trucks to respond to strong demand," American Honda Motor CEO Toshiaki Mikoshiba said.
Hyundai Motor has been producing its Santa Fe Sport model at its Alabama plant since June to increase supply of the SUV while sales of its mainstay sedans such as the Sonata stagnate.
Toyota will increase production capacity of its Tacoma pick-up truck at its plant in Mexico by more than 60,000 to an annual 160,000 by 2018 while it is also looking to its upcoming C-HR crossover model [now in production in Turkey with US exports possible] to lift sales in the segment.
Japanese exports of Toyota's RAV4 to the United States rose 20% in January-September from a year ago, even as the model's production at its plant in Canada has increased by 3% over the same period, Reuters said.
Nissan has boosted exports of its Rogue crossover from Japan to North America by 27% to 56,000 units in the April-September period from a year ago, while it also imports a large number from South Korea.
In August the automaker moved production of its Armada SUV from Mississippi to Japan to make room to make more Titan pick-up trucks and Murano SUVs. In April-September it shipped 8,000 Armadas to North America.
Toyota, Nissan and Honda all anticipate that the rampant growth in the US market may slow going forward, and analyst Lindland told Reuters flexible production capabilities, rather than more capacity, was key to keeping pace with demand.
"I wouldn't recommend adding new plants because the market is plateauing," she said. "There's a fine line between having enough inventory and over building."
