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Honda Expands 200,000 Units; Kia Defers 300,000 Units

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This is what we do. AutoPacific and VehicleVoice contuously monitor the American and worldwide auto industry for issues that impact VehicleVoice panel members. The simple fact that Asian manufacturers are adding capacity or delaying capacity additions in North America are major issues.
Kia Puts 300,000 Unit Plant in Georgia on Hold
In early March 2006, Kia announced that they were going to build an all-new greenfield assembly plant in Western Georgia. This 300,000 unit, $1.2 billion plant likely would have provided Kia with the NAFTA capacity to build an all new pickup truck. This plant, along with Toyota adding capacity at the newly available Subaru indiana Automotive plant (to build the Toyota Camry) put more pressure on the Big Three.
Pressure is temporarily off given Kia’s April 27 decision to indefinitely defer building the plant in Georgia and an additional plant in Eastern Europe in Slovakia. This is a total of $2.4 billion in new plant construction put on hold. The suspension was due to the management crisis Hyundai-Kia is facing in Korea with its Chairman Chung Mong Koo having been put in the slammer (Seoul Decention Center) on charges of embezzlement and breach of trust. Chairman Chung has been closely involved in all decisions concerning Hyundai and Kia plans – worldwide and in the USA.
Honda Decision for a New Plant Replaces Kia Threat
While Kia backed off in late April, Honda announced on May 17 it is building a new 200,000 unit assembly plant in North America. Honda, a master at flexible assembly and super-efficient plants, will have capacity for about 1.6 million units in North America when the new plant is on line in 2008. At present, the site for the new plant has not been announced.
Kia Likely Will Be Back Soon
We also have to believe that the deferral of the Kia assembly plant is only temporary. Kia’s pickup truck concept has been favorably received at auto shows and clearly could have a place in the USA market – but Kia needs a NAFTA source to avoid the 25% “chicken tax” on imported pickup trucks. Once the smoke clears from the scandal surrounding Chairman Chung the go code will likely be given again.
Pressure on Big Three Continues Unabated
It does not matter if the pressure is coming from Japan-based competitors or Korea-based competitors, the challenges to the American auto makes continues to increase. Saddled with older facilities, aging workforces, UAW contracts and work rules, the American manufacturers continue to be battered by the new, non-union plants from Asian manufacturers on their home soil. There are also vibrations from Europe that possibly a Peugeot, Audi or Volkswagen plant could be in the offing.
STAY TUNED


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Honda's Building a New Auto Plant

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Site to Be Determined
Among news of manufacturing facilities in all kinds of industries leaving the United States, several auto manufacturers are continuing to invest in expanding and building more North American production, and the latest news is from Honda.
Honda has steadily and consistently expanded its North American production base since their first plant here. Back in September 1979, Honda began building motorcycles in Marysville, Ohio, and still does. That was followed in November 1982 with auto assembly at a new plant, also in Marysville. Since then, Honda has consistently increased its manufacturing presence in the United States and Canada, with engine and transmission facilities as well as additional vehicle assembly plants.

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Honda has capacity to build 1.4 million vehicles in North America from six auto plants, supported by several engine and transmission facilities. With the latest CR-V joining the assembly line in Ohio, there will be only a few products in Honda’s U.S. lineup not built here for 2007 model year. These are the newly introduced Fit, the low-volume S2000, and the even-lower-volume and now-cancelled Insight, though the Hybrid Civic is also imported. And we’re not even mentioning facilities for motorcycles, generators, and lawn mowers.
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Honda has announced more increases for the last half of this decade. Though Honda already knows what locations are in contention and isn’t telling, during 2008 an all-new vehicle assembly plant will go on-line somewhere in the United States. This new plant will eventually have capacity for 200,000 units and Honda expects it will bring in another 1500 jobs. Which vehicles will come from the plant has not been announced, but if the Fit does well, building the next generation in the States is a logical choice. Honda’s also develops plants that are flexible and can build several different models; the new facility will also be able build several models. Along with the new assembly plant, a new engine plant is also going up next to the Alliston, Ontario, plant. Engine and transmission capacity is also being expanded in existing Ohio and Georgia facilities.
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Summary: Honda’s North American Auto Assembly
Alliston, Ontario, Canada: Honda Pilot and Ridgeline, Honda Civic sedan (Canada only), Acura EL (Canada only), and Acura MDX
Lincoln, Alabama: Honda Odyssey and Pilot
East Liberty, Ohio: Honda Civic sedan, Civic coupe, Civic GX, Element
Marysville, Ohio: Honda Accord sedan and coupe, Acura TL
Mexico: Honda Accord sedan (Mexican market)


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Nissan Altima All New for 2007

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Nissan Mid-Size Sedan All New for 2007
Whenever a high volume mid-size sedan is introduced it is, by definition, big news. These high volume sedans are the mainstream movers of the auto market. The king of the hill is the Toyota Camry, new for the 2007 model year and on the market in Spring 2006. Camry is the top selling “automobile” on the market. The Honda Accord is the second of the top tier Japanese heavyweights. The Nissan Altima is the third of these top tier Japanese competitors. Just about every buyer of a mid-size car looks at one of these three entries before buying. Of course, we can’t forget the likes of the Ford Fusion, Chevrolet Malibu and Impala, Mazda6 or Mitsubishi Galant, but the top three from Toyota, Honda and Nissan command the most attention.

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Altima Evolves in Style Even With All New Platform
Nissan showed its new-for-2007 Altima at the New York Auto Show in April and slipped in a few surprises. Counter to most recent design moves, the new Altima’s D-Platform body rides on a 1-inch SHORTER wheelbase. This is a bit surprising when most new cars get longer wheelbases as they evolve these days. Overall length remains the same.
CVT Standard with V6 – Brave Move Reminiscent of Murano
Additionally, Altima’s automatic transmission is now a CVT with the V6 rather than a geared automatic. A 6-speed manual is available for those who like to row between gears. This CVT news is major. Probably means a substantial cost reduction. The Nissan Murano crossover SUV has had a CVT since day one and has done pretty well. Whether a CVT in a major application like Altima is accepted time will tell. Brave move.
Styling Evolutionary – Interior Execution Critical to Success
The new Altima has evolutionary styling. You can probably say that it is not as distinctive and sophisticated as the previous generation Altima, but it is more distinctive than Accord or Camry.
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A major bugaboo for the last Altima was its cut rate interior for the first three years on the market. Until a major interior upgrade for the 2005 model year, Altima interiors were downscale. Clearly met cost targets but not touch targets. After adding hundreds of dollars in interior upgrades for 2005, Nissan suppliers were given very aggressive cost reduction targets for the 2007 model. Hopefully, they have found the cost offsets in places where consumers can’t see or feel them.
Nissan’s abbreviated press kit states, “Enhanced interior feel with refined workmanship, expanded use of soft materials (such as padded armrests) and chrome accents.” Can’t wait!
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Altima Still Nicely Powered
Power for the Altima comes from a 3.5L DOHC 24-valve V6 with 265-plus horsepower. Its 2.5L DOHC 16-valve 4-cylinder has 165-plus horsepower.
Well, jury is out on the new generation Altima. We’ll have to wait until we drive one and experience the interior over several miles before reaching a verdict.


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Latest Toyota vs. Honda Hybrid Faceoff: Camry vs. Accord In Another Dimension

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Camry Hybrid Launches with $25,900 Price Tag
Toyota has just announced pricing for its latest hybrid, the Camry. Sitting at the heart of the car market, this family sedan has a 187HP four-cylinder hybrid system that offers almost as much power as the launch V6-powered 2002 Camry. For a mere $25,900, one can get a hybrid powertrain and standard equipment including automatic headlights, premium audio, cruise control, Bluetooth, power driver’s seat, sixteen-inch wheels, heated side mirrors, dual-zone automatic climate control, and an ECO button that further improves fuel economy by controlling the HVAC system in certain situations. It arrives in dealers in May 2006.
This is an issue that VehicleVoice and AutoPacific has been tracking. Will a performance-oriented hybrid be more persuasive than a fuel economy biased hybrid. Honda has adopted the performance strategy with Accord, but not with Civic. Toyota has gone the fuel economy route with its Toyota brand hybrids, but with performance-oriented strategies with its Lexus brand hybrids. Over time, it will be very interesting to see how these differing strategies play out.

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Accord Hybrid Versus Camry Hybrid
Camry launches with a price about $5000 less than Honda‘s Accord hybrid sedan, which uses a V6 and, with 253HP, offers significantly more horsepower. This dramatic difference in horsepower ratings presents an interesting case study. So far, hybrids have been primarily for improving fuel economy, as with the Prius and Civic hybrids, or for getting luxury performance with a smaller hit at the pump, as with the Lexus hybrids. But the Camry and the Accord hybrids go head-to-head in segment and size with slightly different philosophies, giving the market an the opportunity indicate a preference for hybrids with improved overall performance versus for hybrids focused more purely on improved fuel economy.


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Consumer Reports Top Ten Picks of the Year

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Every April, Consumer Reports publishes its Annual Auto Issue. This is the most widely read issue of Consumer Reports by far. There is information not only on new cars and trucks, but also on cars that have been in operation for years. VehicleVoice survey research and AutoPacific survey and focus group research concludes that Consumer Reports can have a significant impact on what cars and trucks an American driver may select. When asked what information sources a person uses when deciding what car to look at, Consumer Reports is often the first source mentioned.

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Consumer Reports has gone beyond simply reporting the results of the surveys of its subscribers. Now they weigh in editorially and even select a Top Ten. But those vehicles are those discussed in Consumer Reports’ press releases. When you delve deeper into the April 2006 issue itself, there are many more vehicles worthy of attention. But, first for the Top Ten, as determined by Consumer Reports:

Best Sedan Less Than $20,000: Honda Civic

Best Sedan $20,000 to $30,000: Honda Accord

Best Sedan $30,000 to $40,000: Acura TL

Best Luxury Sedan: Infiniti M35

Best SUV Less Than $30,000: Subaru Forester

Best SUV More Than $30,000: Toyota Highlander Hybrid

Best Pickup Truck: Honda Ridgeline

Best Minivan: Honda Odyssey

Best Green Car: Toyota Prius

Most Fun to Drive: Subaru Impreza WRX-STi

Yes, you are right. There are no American cars or trucks in the list. There are no European cars in the list. There are no Korean cars in the list. Japanese brands swept the 2006 Consumer Reports Top Ten. And of those Japanese brands, Honda (including Acura) got five of the Top Ten positions. This is the first time that Japanese brand vehicles have swept these awards.

There is consolation, of course, that the Hondas are at least assembled in the USA.

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Latest Honda Civic Type R Introduced in Geneva

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Type R Concept Also Introduces a New Bodystyle.
North America already gets a hot Civic in the form of the two-door Si, but the sporty setup for Europe and Japan bears the Type R name. Though North American buyers do not get a Type R model, the Si offers the same powertrain with less aggressive chassis tuning than a Type R. Introduced as a near-production concept at the Geneva auto show the first week of March 2006, the Civic Type R is a three-door hatchback instead of the two-door coupe sold in the USA and, shortly, the American four-door Si sedan versions. In the USA, Type R has been reserved for Honda’s Acura division, but, while the model designator may not be appropriate for the Honda brand in the States, Civic Type R components may be desirable.

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Though the previous Type R Integra won over many U.S. enthusiasts, we haven’t seen a Type R in the States since the 2001 model year version. The Type S models that Acura offers now do not have the same rough edges and aggressive personalities of Type R models.
The Civic Type R gets the same 197HP 2.0L DOHC 16v I4 that the U.S. Si offers and goes on sale in early 2007. Civic Type R models have traditionally offered about 200HP, but with the improvements to the suspension and chassis that the 2006MY change brought being further enhanced by the Type R treatment, the driving experience should be more involving and entertaining. More pedestrian versions of the 3-door hatchback will launch ahead of the Type R in Europe and Japan, though North America will not see the 3-door bodystyle. As Honda also announced its return to Formula 1 with a full works team, the company asked team driver Jenson Button to assist with the Geneva Civic Type R Concept unveiling.
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Motorweek 2006 Driver's Choice Awards

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Motorweek, the PBS-oriented car show, announced the winners of its 2006 Driver’s Choice Awards at the 2006 Chicago Auto Show. It will be interesting to see how these winners correspond to the owner awards from VehicleVoice and AutoPacific. The surveys for the annual AutoPacific Vehicle Satisfaction Award are in the field during the 1st Quarter 2006 and winners will be announced in early May.
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Their winners include:
Best of the Year: Honda Civic
Best Small Car: Honda Civic
Best Family Sedan: Hyundai Sonata
Best Minivan: Honda Odyssey
Best Convertible: Pontiac Solstice
Best Luxury Sedan: Infiniti M-Series
Best Sports Sedan: BMW 3-Series
Best Performance Car: Ford Mustang
Best Small Sport Utility Vehicle: Toyota RAV4 (guess they didn’t measure it… Mid-Size SUV now)
Best Family Sport Utility Vehicle: Ford Explorer and Mercury Mountaineer
Best Pickup Truck: Ford F-150
Best Eco-Friendly: Toyota Highlander Hybrid
Best Dream Machine: Chevrolet Corvette ZO6, Dodge Viper SRT10 Coupe, Ferrari F430
Special Category: Most Jane Car: BMW 3-Series


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Honda Civic and Ridgeline Win More COTY Honors

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New vehicles from American Honda have swept the 2006 North American Car and Truck of the Year Awards. The all-new Honda Civic won the Car of the Year Award adn the Ridgeline Sport Utlity Truck won the Truck of the Year Award. The Civic has been on sale since late Fall 2005 and Ridgeline was introduced in Spring 2005. Both are 2006 models.
These awards mimic Car and Truck of the Year Awards by Motor Trend magazine announced earlier.
The new Civic replaces what may be the most lackluster Civic of all time. The Civic had devolved into a typical econobox that sold on the basis of its stellar image and name, not because it was the hiighly desirable Civic of the past. The new Civic corrects that. VehicleVoice and AutoPacific analysts rate the Civic as one of the best small cars on the road today… aspirational, exciting, and fun to drive.

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The Ridgeline has not sold up to the expectations that Honda announced when the truck was introduced. Having slightly weird styling and being based on the Odyssey minivan platform, the Ridgeline is a great driving pretend truck. Full of innovative ideas that impressed the Car of the Year judges, Ridgeline deserves to succeed. It has not sold up to expectations likely due to its relatively high price point… substantially higher than “real trucks” like the Ford F-Series and the Chevrolet Silverado.
American Honda may use the early lack of success of the Chrysler Pacifica as a case study. Pacifica was overpriced when it was introduced. People did not know what kind of vehicle it is. The idea that Pacific was a “sports tourer” did not mean anything to anybody. But Chrysler played around with its positioning and Pacifica now sells in respectable volumes.
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It’s interesting that Honda’s press release announcing its achievement is pretty matter-of-fact. Ho-hum.


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Honda's Newest Civic Earns Its Reputation

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Honda introduced the latest version of its Civic in early Fall 2005, the eighth generation of a product at the core of Honda’s existence in North America. Though Accord remains Honda’s best-selling product, Civic is a close second. Civic’s annual sales have remained at or above the 300,000-unit mark since about 1997, despite that the seventh-generation was a shadow of former generations and received heavy criticism from public and press alike for its de-contented feel and lack of enthusiasm versus prior iterations. In spite of this, as recently as 2004 the Civic outsold its nearest competitor (Ford Focus) by more than 100,000 units. Though the seventh-generation sold well, it did so by skating on a solid image generated by previous iterations. The new-for-2006MY Civic restores the substance behind the reputation.
The results of this transformation are being immediately felt. The eighth generation is praised even more than the prior car was criticized. It recently won Motor Trend Magazine’s Car of the Year award and is a finalist for the same honor in the North American Car of the Year competition. With such advance praise, we were looking forward to a turn behind the wheel. Now that a Civic EX has spent a week in AutoPacific’s Southfield, Michigan office, we’re happy to say that we’re also impressed.
The Civic has returned, long live the Civic!

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Automotive Lease Guide Releases Residual Value Awards

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Automotive Lease Guide is an influential and closely watched barometer of the value of brands and vehicles in the USA. ALG’s data are used by leasing companies to set the values for vehicles two and three years in the future and are critical in determining what lease rates a lessee will pay.
While ALG’s Residual Value Awards are not of the ilk of Motor Trend, Automobile, Car & Driver enthusiast awards, they provide an interesting counterpoint to awards based test track measurements, zero to 60 times and seat of the pants opinions. Here is the text of the ALG release…

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ALG’s annual Residual Value Awards honor those vehicles in each automotive segment predicted to retain the highest percentage of their original price. For the third consecutive year, American Honda Motor Company, Inc. heads the list with the Honda Brand winning the Industry Brand Residual Value Award. Honda also received two individual segment awards: the Odyssey for the Minivan Segment and the Accord for the Midsize Car Segment. This is the fifth consecutive win for the Honda Odyssey and the second win for the Accord.
Acura, a division of American Honda Motor Company, Inc., is the winner of the Near Luxury Car Segment for the TL.
BMW of North America, LLC has once again made a strong showing by winning the Luxury Brand Residual Value Award for the third consecutive year. MINI USA, a division of BMW of North America, has won the Compact Car Segment for the MINI Cooper for the fourth time.
Toyota Motor Sales, USA, Inc. took home the most Residual Value Awards this year by winning six individual segment awards: the Avalon for the Fullsize Car Segment, Tacoma Pick-up for the Compact Truck Segment, Tundra for the Fullsize Truck Segment, RAV4 for the Compact SUV Segment, 4Runner for the Midsize SUV Segment, and the Sequoia for the Fullsize SUV Segment. This is the fifth consecutive win for the Toyota Tacoma, Tundra and Sequoia; and the third consecutive win for the 4Runner.
Mercedes-Benz USA LLC is the winner of this year’s Luxury Car Segment award for the CLS Class.
The Sports Car Segment award this year goes to Porsche Cars North America, Inc. for the 911 Carrera.
And last but not least, the CUV (Crossover Utility Vehicle) award goes to Land Rover North America, Inc. for the Range Rover Sport.
“In an era of negative pricing and overcapacity, Residual Value excellence is increasingly difficult to achieve,” said Raj Sundaram, President of Automotive Lease Guide. “Both the segment and brand winners clearly demonstrate that quality products combined with effective pricing strategies will rise to the top.” Sundaram added that, “While the top rankings did not change, several brands have shown significant improvement over last year, highlighting the importance manufacturers are placing on residual value as a long-term objective.”
This year’s awards are based on 2006 model year vehicles. For the fourth year, ALG has also included awards for the brand with the highest predicted resale value of all industry and luxury vehicles. The awards are derived after careful study of segment competition, historical vehicle performance and
industry trends. Award winners are featured on http://www.alg.com, The Wall Street Journal, Automotive News, and other automotive publications and websites dedicated to bringing the industry’s best performing models into the
public eye.


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