Honda launches 2011 Accord amid sagging sales, supply problems

MANILA, Philippines -  Despite sagging sales and raw material supply problems, Honda Cars Philippines Inc. (HCPI) launched Tuesday night its flagship model – the Honda Accord – in a simple ceremony that was devoid of the pomp and pageantry that characterized product launches of the past.

The 2011 Honda Accord which became available in the local market starting yesterday, was described by HCPI president and general manager Tatsuya Natsume as “the ultimate premium vehicle of choice for those who truly understand power and technology.”

The new model retails at an introducty price of P1.7 million for the 2.4-liter variant and P2.05 million for the 3.5-liter variant with five colors to choose from: Brilliant White Pearl, Crystal Black, Polished Metal, Bold Beige and Urban Titanium.

The launching came amid a bleak scenario where the company expects to miss its sales target and may even post lower sales than last year’s as a result of supply problems spawned by the earthquake and tsunami that hit Japan early this year.

In an interview on the sidelines of Tuesday night’s Honda Accord launch, corporate communications and vehicle sales head Voltaire Gonzales said their 17,600 units sales target is currently under review. In fact, he said there is a chance their sales will be even lower than the 16,600 units Honda sold last year.

 “Our sales this year will be lower than our sales plan. It might even be lower than our sales last year,” he said.

Since April, Honda has been producing at 50-percent capacity and this is expected to continue until June. By that time Gonzales said they will have a clearer picture of the supply situation.

“We just want to warn everyone because the auto industry has an effect on other industries like banks and insurance. We just want to be honest and say we are still affected by the crisis,” he said.

“Everything is unstable at the moment,” Honda president Tatsuya Natsume said.

Before the crisis, they used to produce 45 to 50 units of City and Civic per day.

Even with the production cuts, Natsume said they have not laid off any worker or forced anybody to go on leave. He said that while others are in production, the remaining staff are undergoing training. The Sta. Rosa plant has 400 workers while Honda as a whole has 650 employees.

“What is important is that we keep on operating,” Natsume stressed.

He said another option is to cut their working days in half. They are now working six days a week. He said an option is to make it a three day work week but at the moment they are comfortable with their decision to simply cut the production.

For their completely built up units (CBUs), Natsume said that they have not encountered any problems so far. They source the parts from Thailand and Japan. However, he said they expect their CBU allocation to also be reduced by 50 percent.

Natsume said they were forced to cut production for April and May because the flow of raw materials from Japan has been erratic. He said the production situation in Japan is yet to normalize and they think this will happen no sooner than the end of the year.

Natsume said they have not received new shipment of microcomputers from Renesus, the company producing this microchip. He said all their vehicles are fitted with this microcomputer that is why their entire production is affected. Natsume said Renesus has completely stopped its production and will only resume operations in June.

He said they are now using up their inventory and they have decided to assemble a mere half of their normal production to make the supply last longer.