Honda Poised for More Global Growth in '07

| About: Honda Motor (HMC)
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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. Honda-HMC-1yr-chart-12-19-06 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 (ITF), BLDRS Asia 50 ADR Index (NASDAQ:ADRA)

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