Honda Motor Co., Ltd. HMC is bringing CR-V sport utility vehicle (SUV) back in Japan after a gap of two years, per Bloomberg. This is the latest initiative taken by the company to regain its lost position from other automakers.
Demand for small and compact vehicles in the country enforced Honda to stop selling Honda CR-V in 2016 and rather bet on its subcompact crossover SUV, Vezel. However, of late, a similar trend of rising fascination for SUVs in the United States and China has also been witnessed in Japan. This is evident as Japan’s yearly SUV sales topped 500,000 units in 2017.
Under CEO Takahiro Hachigo, Honda is launching global vehicle models in more markets rather than following its earlier strategy of offering country-specific models. In 2017, the company reintroduced its Civic model in Japan, after taking a six-year gap.
Honda Motor Co., Ltd. Price and Consensus
Further, this CR-V relaunch is targeted to compete with similar variants of other automakers, which include Subaru Forester, Nissan X-Trail and the upcoming Toyota RAV4. The company targets to sell 1,200 units each month, starting this week.
In its home country, Honda is betting on three vehicle types – gasoline, hybrid and a three-row variant to restore the demand of its non-minicar models. From the beginning of the year to July, the company’s domestic sales of such models fell 5%. Conversely, Honda’s Japan-only segment, consisting of vehicles with engines of up to 0.66 liters, witnessed 9% rise during the same period.
Price Performance
In the past three months, Honda’s stock has lost 3.8%, outperforming 4.6% decline recorded by the industry it belongs to.
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Zacks Rank & Other Key Picks
Honda currently carries a Zacks Rank #2 (Buy). Other top-ranked stocks in the auto space are AB Volvo VLVLY, PACCAR Inc. PCAR and Allison Transmission Holdings, Inc. ALSN. Volvo and PACCAR carry a Zacks Rank of 2 while Allison Transmission sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Volvo has an expected long-term growth rate of 15%. Shares of the company have risen 1.1% in the past three months.
PACCAR has an expected long-term growth rate of 10.8%. Over the past three months, shares of the company have gained 10%.
Allison Transmission has an expected long-term growth rate of 10%. Shares of the company have risen 20.1% in the past three months.
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