Man! Read this and wonder if Mercedes might be in for a real struggle to compete with Honda/Acura in the future.

TOKYO (AP) - Honda Motor Co. is going to focus on creating quality cars rather than pursuing quick growth in sales, the new president of Japan's No.2 automaker said Thursday.

"I'm not setting sales targets," said Takeo Fukui, who took office as president and chief executive last month. "All that may be convenient for the business but it's totally irrelevant to the customer."

He said Honda has no plans now to add plants in North America in the next several years and would concentrate on the ongoing capacity increase at its Alabama plant to 300,000 vehicles a year from 150,000 vehicles to meet growing demand.

Honda has assembly operations in Alliston, Ont., northwest of Toronto, that employ 4,200 workers making about 360,000 vehicles annually.

Under Fukui's leadership, Honda will refuse to aimlessly seek numbers in selling cars and will stick to pleasing the customer "one by one," Fukui said, accepting the results as they come.

Fukui acknowledged Honda had come under intense pressure to boost sales in the last several years because of the onslaught of mergers among the world's automakers aimed at gaining profitability and cost cuts through sheer size.

And that sometimes may have led Honda off what Fukui believes is its true track.

With the exception of Toyota Motor Corp., Honda's Japanese rivals have entered alliances with foreign automakers - Nissan Motor Co. with Renault SA of France and Mitsubishi Motors Corp. with DaimlerChrysler AG of Germany.

Honda will continue to go at it alone, said Fukui, a soft-spoken, diminutively built man who conveys a quiet seriousness.

"When all cars are starting to look alike, we are looking for qualities that make Honda distinct," he said in an interview at headquarters in Tokyo.

"Our company takes the basic performance of the car itself very seriously - the drive, the stop and the turn. The car has to be fun to drive. That's the root of our cars."

Fukui, 58, the former head of Honda's U.S. manufacturing operations, takes over at a time when Honda is doing booming business in all regions outside Japan, where it is losing to the Japan's No.1 automaker, Toyota, and a revived Nissan.

In the fiscal year ended March 31, Honda posted its highest profit in company history, a profit of 427 billion yen, the equivalent of $3.6 billion US and an 18 per cent increase from the previous year.

It sold 2.89 million vehicles for the fiscal year, up eight per cent from the previous year. But vehicle sales in Japan were down 3.3 per cent at 849,000, while they were up 11 per cent in North America at 1.5 million vehicles.

That trend has continued in recent months.

"Honda is stuck in a long winter as far as the Japanese market," said Masaaki Sato, who has written books on Honda. "If you can't sell cars in your own home market, that means Honda can't feel it's on sure footing."

Honda has produced hit models here, such as the Fit subcompact, but as rivals come out with similar models, Honda has had a tough time.

"The Japanese market is important," Koichi Amemiya, Honda executive vice president, told The Associated Press. "We can't let Toyota take all that alone."

Fukui said Honda will rely on technology to win back buyers although he refused to give details of what was in the works.

Honda is setting up new research centres in Japan, the United States and Germany, where it will study lighter material for car bodies, fuel made from plants and artificial intelligence, the company said Thursday.

"Presidents at Honda tend to have a common trait," said Nobuyuki Kondo, a Honda general manager. "They never forget to pursue a dream. And we just follow that."

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John Shellenberg
1998 C230 "Black Betty" 240K

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