Honda’s CR-V sport utility vehicle will be made for the first time in the United States at one of two Ohio plants, the production sites of five other Honda vehicles, a move that affects the automaker’s UK plants.
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According to the Associated Press (AP), Honda of America Manufacturing said it wanted to move production of the CR-V for the US market from the United Kingdom closer to SUV buyers who mostly live in the United States.
AP noted that Honda is not the only vehicle manufacturer bringing more production to the United States. Swedish truck maker Volvo AB previously said it would bring assembly of its truck engines to Hagerstown, Maryland and this week added it may move more production to the United States if the dollar keeps weakening.
CR-V production will begin in 2006 at one of two Honda plants northwest of Columbus, in Marysville or nearby East Liberty, the report said.
Japan will continue making the CR-V for the US market [dual sourcing Japan/West Coast-UK/East Coast has operated for a couple of years], but the two plants in the United Kingdom will make CR-Vs, including new diesel versions [launched as part of a mid-life facelift], for the European market, Yuzuru Matsuno, Honda of America spokesman in the company’s Detroit offices, told the Associated Press.
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By GlobalData“Bringing production closer to sales allows better matching of the two and is more efficient for the company and the customer,” Matsuno reportedly said, adding that the move will allow more production capacity for the European market.
“We are expecting big growth in sales of the diesel CR-V in the European market, and that would crowd out production in the U.K. for the US market,” he told AP.
Ohio production of the CR-V is not expected to result in more jobs, according to Honda spokesman Don Hensley at the company’s Marysville offices.
The two Ohio plants are Honda’s only plants in North America using the flexible manufacturing system that allows production of both cars and light trucks, Hensley told AP. The East Liberty plant makes the Element crossover vehicle, and a new luxury Acura SUV will be made at one of the two sites. Honda also makes the Accord, Civic and Acura TL cars at Ohio plants, which employ about 16,000 workers.
Honda sold nearly 134,000 CR-Vs in the United States this year to the end of November, about a 1% increase over last year’s sales.
David Littmann, chief economist for Comerica Inc. in Detroit, told AP the move should benefit the company.
“It’s always good to make moves that are better, faster and cheaper for the consumer,” he reportedly said. “Honda is also ducking the higher costs overseas while freeing up space to build their new diesel products.”
Erich Merkle, senior analyst for IRN Inc., an automotive forecasting and research company in Grand Rapids, Michigan, told AP he had been expecting Honda to bring CR-V production to the United States.
“It makes sense to make the CR-V in North America, especially with the dollar declining relative to the pound, the euro and the yen,” he said. “Honda isn’t the only company seeking to reduce its risk in terms of fluctuations in the exchange rate,” he told the Associated Press.
