Honda 2008 Annual Report Download - page 26

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In calendar 2007, total demand in the United States declined from the previous year, to 16,150,000
units. A decline in new car demand became clear toward the end of the year as consumer inter-
est in purchasing new automobiles declined substantially due to such factors as the increase in
oil prices and the turmoil in financial markets stemming from the subprime mortgage crisis. In
addition, the market continued to shift from light truck models, such as large sport utility vehicles
(SUVs) and pickup trucks, toward more fuel-efficient small-size passenger cars and crossover
utility vehicles (CUVs).
Amid these operating conditions, unit sales of Honda automobiles in North America during
fiscal 2008 rose 3.5%, to 1,850,000 units, despite a decline in sales of the Pilot, as sales of the
small-size Fit and the CR-V in the CUV category continued to be strong, and a favorable sales
performance was recorded for the core Accord and Civic models.
In the production area, in Mexico, where sales are expanding steadily, Honda shifted the
model for production at the factory from the Accord to the CR-V, which is in strong demand in its
domestic market, while also increasing production capacity from 30,000 units a year to 50,000
units in September 2007.
Total demand in Europe* in calendar 2007 amounted to approximately 15,960,000 units, about
the same as in calendar 2006. This was because the total demand in Germany, Europe’s largest
market, was below the levels of the previous year for 12 consecutive months, despite the continu-
ing growth of the markets in Central and Eastern European countries. Total demand in Russia in
calendar 2007 showed strong growth, to about 2,580,000 units, as a result of strong economic
conditions accompanying the rise in prices of crude oil and other resources that Russia possesses
as well as the rapid expansion of automobile loan financing in that country.
Amid this operating environment, during fiscal 2008, Honda’s automobile sales increased
20.7%, to 391,000 units. Factors accounting for this performance were the expansion in sales
of diesel-powered cars as well as favorable sales for the new model CR-V, which was introduced
Civic (North American model)
Automobile Business
Europe
North America
Annual Report 2008
24