With New Plant Coming Online, Honda Could Add Fit-Based Crossover

If there is one car in the Honda lineup that has remained well-regarded, it is the Honda Fit. The Fit was a pioneer in the U.S subcompact/B-segment and it when it was introduced, it clearly outshone its competitors. Since then the bar has been raised, but the Fit remains a good value.

That has put Honda into something of a bind regarding sales figures. The Fit is one Honda product line that is built exclusively in Japan. Thanks to an unfavorable currency exchange situation, the company is losing money on each one sold. With a loss-management strategy in place, demand is much higher than Honda is willing to oblige.

The situation is going to be fixed once Honda’s new plant in Mexico comes online in 2014. There, the next-generation Fit will be produced for North America as well as other export markets around the world. With the new (profitable, might we add) capacity now available, Automotive News reports that Honda is looking to add a crossover variant to the Fit platform. Currently, around 800,000 units of the Fit are sold worldwide. Honda is hoping a new crossover model would boost that over the 1,000,000 mark, potentially adding as much as 400,000 units of volume globally.

The new crossover would be targeted at the U.S and Europe in particular. The smallest crossover Honda currently sells is the popular CR-V. The new Fit CUV would be aimed at models like the Buick Encore and Nissan Juke. Honda’s model strategy runs counter to conventional industry thinking right now; while everyone else is moving toward globalization, they are breaking up research and development regionally. That means specific models for different markets, along with local production. Volkswagen has done this as well. Given Honda’s long-term history of hitting the U.S market sweet spot, this could be a good formula for boosting sales, as long as costs can be kept in check.

About The Author

Tony Pimpo is a young automotive journalist who lives in Northern California. He believes the future of the automotive industry will depend in a large part on the recommendation of enthusiasts and Generation Y. More than ever, automakers lately have realized the power of Gen Y. Not only in regards to buying power, but in driving opinion and spreading a brand’s message through the internet and various forms of social media. His appreciation for cars formed at an early age, thanks to his dad, who has always been involved with cars in different ways over the years. Tony has contributed to various websites in his pursuits, and is on staff at GMInsideNews, where he has been writing since the age of 12.

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