Honda May Pass Chrysler in North America Production

(Bloomberg) -- Honda Motor Co., Japan’s second- biggest automaker, may build more vehicles than bankrupt Chrysler LLC in North America this year, further weakening Detroit’s grip on its home market.

Honda narrowed the gap to 17,011 vehicles at the end of April from 236,645 a year earlier, and with most Chrysler plants shut for as long as 60 days analysts expect the Japanese automaker to overtake its rival. Honda may also surpass Chrysler in U.S. sales to trail only bankruptcy-threatened General Motors Corp., Toyota Motor Corp. and Ford Motor Co.

“There’s a sea change under way,” said Michael Robinet, an analyst at forecaster CSM Worldwide in Northville, Michigan. “This crisis with Chrysler and GM has acted as an accelerant to the systemic change that was already occurring.”

Toyota passed Chrysler in U.S. sales in 2006 and then Ford in 2007, as Japanese automakers lured customers with more fuel- efficient vehicles. The big three U.S. automakers’ market share has plunged to 44.4 percent this year, from more than 70 percent a decade ago, while overall sales have slumped to the lowest volume in about three decades.

Honda, fifth in the U.S. since 1988, has outsold Chrysler this year as of April. Its sales in the country slid 32 percent to 332,014, compared with a 46 percent drop for Auburn Hills, Michigan-based Chrysler to 323,890. Overall U.S. sales are down 37 percent through the first four months of the year.

Chrysler Plunge

“Market share isn’t something we target,” said David Iida, a spokesman for Honda’s U.S. unit, based in Torrance, California. “We’re very committed to local production, irrespective of what other companies are doing.”

The automaker fell 1.6 percent to 2,855 yen as of 12:03 p.m. in Tokyo trading. The stock has risen 50 percent this year.

Industrywide North American car and light-truck production plunged 49 percent through April, with Chrysler leading declines among major manufacturers, according to Haig Stoddard, an IHS Global Insight analyst. Chrysler’s production in the period fell 57 percent to 322,773, based on company figures.

Honda built 305,762 autos at assembly plants in the U.S., Canada and Mexico through last month, down 40 percent from a year ago. The maker of Civic and Accord cars has U.S. plants in states including Ohio, Indiana and Alabama.

Chrysler, hoping to emerge from bankruptcy within 60 days as a new company led by Fiat SpA, halted work at most plants on May 4 while it reorganizes. The company also said it’s closing six factories that won’t be part of the Chrysler-Fiat deal.

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