The share price of Honda Motor Co., Ltd. (HMC) increased 0.9% to $36.89 on Mar 11, 2014 after the automaker announced that it is constructing separate Honda and Acura divisions in the U.S. The company will appoint sales and marketing teams for each brand. Previously, U.S operations were segregated by function instead of brand.
John Mendel will head the new American Honda Auto Division. Michael Accavitti will be the senior vice president and general manager of American Honda's Acura Division, and Jeff Conrad for the Honda Division. They will be reporting to Mendel.
Toyota Motor Corp. (TM) and Nissan Motor Co. Ltd. (NSANY) also have a similar operating structure. Toyota has separate divisions for its Toyota and Lexus brands. Similarly, Nissan has divided its Nissan and Infiniti brands into two divisions.
Honda’s worldwide production volume for Jan 2014 came in at 378,718 units, up 10.5% year over year. Production outside Japan declined 0.9% to 281,573 units. However, production in Japan improved 65.3% to 97,145 units.
Lower production outside Japan can be attributed to a 26.7% decline in production in Europe and a 3.9% drop in other regions. North America also posted a 3.9% fall in production due to a 0.9% year-over-year decrease in the U.S. production. This was partially offset by an 8.9% increase in the production in Asia. The year-over-year improvement in Asia was mainly buoyed by a 37.5% increase in production in China.
Honda posted a 107.6% rise in earnings to ¥89.18 (85 cents) per share in the third quarter (ended Dec 31, 2013) of fiscal 2014 from ¥42.97 (41 cents) in the same quarter of the prior fiscal year. However, earnings per share lagged the Zacks Consensus Estimate by a penny.
Currently, Honda carries a Zacks Rank #2 (Buy). Daimler AG (DDAIF), with a Zacks Rank #1 (Strong Buy), is a better-ranked player in the foreign automobile industry.
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