New small car could Fit bill

Honda's new Fit is shown off at the Detroit car show. Picture / Reuters

DETROIT - Honda will consider increasing its US production after watching how sales trends develop this year with the launch of a new small car, says the company's chief executive.

Honda, which is unveiling the Fit at the Detroit car show, plans to import 30,000 to 40,000 of the sporty cars from Japan this year.

Honda chief executive Takeo Fukui said if the Fit met Honda's goal of bringing in customers without drawing buyers away from its long-running Civic line, the company could decide to increase US production capacity.

"At the present time, we have not decided anything. But we are introducing the Fit and we have strong expectations for the Civic," Fukui said.

"We may have to do something here depending on how sales trends go."

Honda swept the major awards at the show on Sunday with the Civic and its first pickup, the Ridgeline, named the top vehicles in North America for 2006 by a panel of car writers.

Fukui said Honda could consider expanding passenger car production capacity at its North American plants or building a new plant - or both.

Another factor to consider was the strength of demand for SUVs, such as the Honda Pilot and CRV, in the face of uncertain petrol prices.

The Fit takes the place of an all-new Civic at the entry-level of Honda's model line-up and will be marketed to younger drivers.

Fukui said Honda expected to sell 1.51 million vehicles in the United States this year, or about 50,000 more than last year.

The projected sales gains come as US car-makers General Motors and Ford struggle to reverse the loss of market share to Japanese rivals.

- REUTERS