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

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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

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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Comments (8)
  1. Strong Yen is a nice way of saying "Weak Dollar" so while this strong Yen is great for Honda the weak dollar is terrible for the Big 3 who are now getting less dollars for their cars overseas.
     
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  2. Would call this a silver lining in an otherwise rough situation for USA Inc. Something of a metaphor for the grim realities associated with generational theft being commmitted by our politicians. Failing to explain the true cost of deficit spending is akin to failing to tell us the truth around hurtful impacts of certain actions on the environment. In the case of deficit spending, may seem noble/moral short-term to spend on things like healthcare, and other entitlements. Long-term, it's simply generational theft. Again, happy to see some opportunities here in the US. Bigger picture, a hint of things to come.
     
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  3. BHO got it dead on. On the other hand, it also means domestic cars are comparatively more afforable than imports, which, since the U.S. is the biggest car market around, could end up working in their favor.
     
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  4. If it means we get a cheaper Fit I'm all for it. Heard there's a hybrid in the works as well.
     
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  5. BHO i actually think this is good for the big 3. They make most of their sites for export overseas and get paid in local currencies which will mean more $$ for their annual reports.
     
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  6. Thats good news to America.
     
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  7. This can only be good for automotive competition, and the U.S. economy. But if it's true, it'll be one more non-union plant in the south that weights the industry even further away from Detroit.
     
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  8. Maybe Honda can buy parts or factories from the big 3 - this could be a good move for everyone.
     
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