Honda to Focus Less on Minicars

President Takeo Fukui announced in an interview today that it will move the development of minicars in the domestic market to a new subsidiary, Yachiyo Industry Co., tomorrow in order to focus on higher-end Honda and Acura models. Although only 40 percent of the company’s domestic sales account for minicars, Fukui says that minicars are a growing market and plans to expand the segment without losing profit, which is almost double that of Suzuki, which is Japan’s largest minicar manufacturer.

Due to the growing sales of minicars, the competition for this segment is great, bringing extreme rivals, therefore, Honda needs to put too much effort into retaining sales. But with Honda’s engineers working on both luxury vehicles and minicars, there is no way they can compete. Therefore, Yachiyo will handle the development, production, and the purchasing for the minicar segment.

Already operating at full capacity, Yachiyo may need to expand its plants in central Japan. Honda plans to add a few more minicar models in Japan.

[Source: Bloomberg]