01/31/08

Honda Bucks January Auto Sales Slow-down

The car business' worst season in many decades has begun.

With a financial panic hovering, the Federal Reserve has cut rates more abruptly than usual, signaling desperation.

Gasoline is "permanently" above $3 in the US. European Union consumers pay eight bucks.

Auto sales are expected to be off 3% for January, but Honda, as predicted here, continues to prosper. Honda's January US sales fell just 2.3 percent.

Nissan sales fell 7.3 percent from a year earlier, while Hyundai had a whopping 23 percent drop-off.

Honda held a 9.6% U.S. market share in 2007, up from 9.1% for 2006.

Hondas, without rear wheel drive and V8 power, sell in good times and bad, avoiding the cyclical downturns that have plagued American builders.

Although profits rose 38 percent in the third-quarter, I look to Honda for signs of a hard landing.

Honda Fit subcompact, Civic, and restyled Honda Accord will do well in 2008.

But even clever Honda could be hurt in 2008-2009. I think these may be crisis years for America and the auto industry.

Honda's motorcycles and lawn mowers, optional in hard times, have already seen sales declines.

The main threat to Honda's ascendancy is the inevitable resumption of the US dollar's fall following the emergency rate cuts. Combined with a strong Yen, this will raise prices on Hondas sold stateside.

Honda has cut revenue projections by 1.2% and reduced global sales targets. This bodes ill for the Detroit three.

Microsoft Internet Explorer users, please use form below to bookmark site: