Yesterday Honda announced a rather positive outlook for 2007, with stronger global sales expected to offset weakness in its home market. And 2006 looks like another record year with global sales rising 5% to 3.55m units. High demand for its remodeled Civic and CR-V has forced Honda to boost production overseas, with capacity expansion planned in Mexico and Brazil. A new auto plant is also set to launch in Indiana in '08. N. America is Honda's largest market, where it has turned in record sales for 11 consecutive years, with sales expected to grow 3% in '07 to 1.56m units. Sales in Europe are seen increasing 13% to 350k units, and growing by the same clip in Asia (ex-Japan and China) to 360k units. Sales in China are expected to reach about 400k units, after missing the 350k target this year, in which sales grew 23% to 320k units. The Japanese market continues to be a challenge, even for rivals, as Honda estimates sales will fall 2% this year to 700k units. Honda said in 2010, it expects to achieve global sales of 4.5m autos and 18m motorcycles (vs. 12.7m this year).
• Sources: Honda forecast, Boston Globe-Reuters
• Related commentary: Japan Auto Exports Remain Robust, My Breakfast With Honda Motor Co., Honda: Sales Surge, But Earnings Hurt By Derivatives Losses, The Race for Fuel Efficiency is On
• Potentially impacted stocks and ETFs: Honda (NYSE:HMC). Competitors: Nissan (OTCPK:NSANY), Toyota (NYSE:TM), DaimlerChrysler (DCX), Ford (NYSE:F), General Motors (NYSE:GM). ETFs: iShares MSCI Japan Index (NYSEARCA:EWJ), iShares S&P/TOPIX 150 (NYSEARCA:ITF), BLDRS Asia 50 ADR Index (NASDAQ:ADRA)
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