The devastating earthquake in Japan couldn't have come at a worse time for Honda. The Japanese automaker was just starting to launch its new Civic for 2012, and the compact car is a major part of the company's portfolio. Any delays or hiccups in the Civic's launch will surely send shockwaves reverberating through Honda's balance sheets.
Sadly, supplies of electronics parts and raw materials from Japan are still hampering automobile production for Honda, even in plants outside its home market. That includes the new 2012 Civic, which is assembled in Greensburg, Indiana and Alliston, Ontario.
Speaking to Reuters, Honda spokesman Ed Miller admitted that Civic production will likely be stuck at around 50-percent capacity until the fall of 2011. Industry analysts predict that the Ford Focus, Chevrolet Cruze and Hyundai Elantra will likely fill in any sales void left by a lack of available Civics.
* UPDATE: Honda has confirmed that Civic production will run at 50-percent capacity for the time being, likely until fall. The automaker expects all other models to be back up to normal production levels by August. See the official release after the break.
TORRANCE, Calif., May 26, 2011 - Honda today announced plans for the accelerated recovery of auto production in North America following the March 11 earthquake and tsunami in Japan. Honda will increase production volume at its North American automobile plants to a rate of 100 percent of the original production plan in August, for all models except the 2012 Civic.
As the supply of parts from Japan improves, production will ramp up in August on a step-by-step, plant-by-plant, and model-by-model basis, with production returning to 100 percent of the original plan for models including the 4-cylinder Accord, CR-V and Acura RDX, as well as all V-6 models including the Accord, Accord Crosstour, Odyssey, Pilot, Ridgeline, and the Acura TL, MDX and ZDX.
Production of the all-new 2012 Civic lineup will continue at a reduced rate of approximately 50 percent due to the limited supply of key components. However, this situation continues to be evaluated and full production is expected to resume sometime in the fall, with plans to meet anticipated strong demand for the fuel efficient new Civic lineup.
"The light at the end of the tunnel is glowing brighter for us, represented by this significant improvement in our production situation," said John Mendel, executive vice president of American Honda Motor Co., Inc. "Throughout this crisis, Honda has been fighting to achieve a speedy recovery, while maintaining a focus on our longer-term plans for continued growth in sales and production in order to meet the growing needs of our customers."
Honda has managed the unprecedented parts supply issues that resulted from the devastating impact of the March 11 earthquake and tsunami in Japan with no layoffs at any of its 14 production plants in North America.
"I am quite proud of the efforts of our manufacturing team and the steps they have taken to keep our team of associates together during this difficult period, while maintaining their normal, outstanding focus on quality for the customer," said Mendel. "We still have challenges to overcome, but once we have normalized operations we will owe them a great debt of thanks."
In 2010, 87 percent of the Honda and Acura automobiles sold in the United States were produced in North America. Honda purchased more than $17.5 billion in parts and materials from OEM suppliers in 2010, putting the average domestic content of Honda automobiles at 80 percent. Honda has 14 Honda plants in North America with the capacity to produce more than three million Honda and Acura products each year, including Honda and Acura automobiles, automobile engines and automatic transmissions, Honda all-terrain vehicles, and Honda power equipment products such as lawn mowers, mini-tillers and general purpose engines. Honda products are made in North America using domestic and globally-sourced parts.