Strong Yen Could Push Honda Fit Production To U.S.

October 19, 2009
2010 Honda Fit Sport

2010 Honda Fit Sport

Enlarge Photo

2010 Honda Fit Sport

2010 Honda Fit Sport

Enlarge Photo

2010 Honda Fit Sport

2010 Honda Fit Sport

Enlarge Photo

Few subjects are as snooze-inducing as macroeconomics, especially when talking about transnational manufacturing decisions, but oddly enough, the lively little Honda Fit has the ability to breathe life into the topic. A report breaking today reveals the strong yen against the relatively weak dollar could bring production of the cute-as-a-button Fit to the U.S.

The move is under consideration according to Honda president Takanobu Ito. Building the Fit in Japan with the tough exchange rate is making it almost impossible to clear the profits they need from the small car. Sales are down, too, but the Fit is doing better than the rest of Honda's lineup in the U.S., so maintaining the bottom line on the little hatchback is key to Honda's plans.

Profit margins are narrow enough on small cars as it is, so the 8% rise of the yen against the U.S. dollar has made it worth looking into adding the Fit to the rest of the Hondas already built in the U.S. Building locally is a core part of the company's American operations, and fitting the Fit into the lineup of home-built cars could open the door to sourcing more high-tech vehicles from Japan.

Some of the cars Honda likely has in store for its high-tech import plans include the CR-Z hybrid, FCX Clarity fuel-cell vehicle and 2010 Insight hybrid. Honda already builds about 80% of the cars it sells in the U.S. locally. It's not yet clear if the upcoming Fit Hybrid would also be built in the U.S., though it would be a logical follow-up to moving conventional Fit production to America.

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