Honda President Says US Carmakers To AVIS

TOKYO June 18, 2003; Edwina Gibbs writing for Reuters reported that Honda Motor Co President Hiroyuki Yoshino said U.S. auto makers will have to pull up their socks in the face of increasing inroads by Japanese competitors into the U.S. market.

"They should try harder," Yoshino told reporters when asked about the Japanese auto makers' steady carving of a greater share of the U.S. market -- the world's largest -- over the past few years and the growing sense of unease created by brutal price wars there.

"Exports from Japan have fallen. We've cut exports every year," he added.

Yoshino, Honda's president for the last five years, was speaking at the launch of the company's Inspire luxury sedan -- his last news conference before stepping down later this month.

Japanese auto makers were more adept at responding to customer preferences and able to develop and bring cars to market much faster than their U.S. counterparts, he said.

He added that some Japanese companies like Honda, were able to command a brand premium that allowed them to keep sales incentives low in contrast to Detroit's Big Three.

"Incentives push down the resale value of a car and consumers take that into account," he said.

General Motors Corp, Ford Motor Co and the Chrysler-side of DaimlerChrysler have thrown an escalating array of financing incentives at consumers, from interest-free loans to heavy cash rebates, ever since the September 11, 2001 attacks on the United States.

Worried about the profit-corroding effects of the price war, a growing number of analysts have placed sell ratings on GM and other U.S. auto makers.

Earlier this month, DaimlerChrysler surprised the market when it disclosed its Chrysler unit would post an operating loss of 1 billion euros ($1.2 billion) in the second quarter due to the cost of incentives.

GM's Chief Financial Officer John Devine has, however, chided Wall Street for its "Chicken Little" attitude, saying the sky was not falling in.

Honda said it was aiming to sell 2,000 Inspire sedans a month in Japan, with the most expensive version of the model featuring a new brake system designed to help prevent collisions.

The system uses a millimeter-wave radar to detect vehicles within a range of about 100 meters ahead. If a collision risk is detected, the system warns the driver as well as automatically pulling the seatbelt back tight before a collision occurs.

Honda said it will need time to assess customer response to the new technology and it may take longer than five years before it makes its way over to the U.S. market.

Yoshino will be replaced by Senior Managing Director Takeo Fukui. His resignation is part of a regular reshuffle as Honda presidents typically spend four to five years at the helm.