This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Honda Regroups Amid Sales Slump

Stocks in this article: HON

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK ( Trefis) -- Honda's (HMC) sales slump continued into November in the U.S., the automaker's largest market.

Year to date, the automaker has seen its sales decline to 5.7 percent compared to last year. Decreased production capacity after the March earthquake depleted Honda's inventories and hurt sales through the second and third quarters of 2011.

Then Thailand floods added more trouble causing parts shortages through October and November that hurt its North American production and sales.

Honda is counting on new model launches and replenishing inventory for a short-term turnaround.

Now Honda is counting on new model launches and replenished inventory to turn around its misfortunes in the short term. It is also aggressively targeting fuel-efficiency technologies to better compete against rivals such as Toyota (TM), GM (GM), Ford (F) and Hyundai.

Our price estimate of $37 for Honda's stock is around 20% above the current market price.

See our complete analysis for Honda stock here.

Honda's six auto production plants in the U.S. and Canada had been making production adjustments since Nov. 2, 2011, due to restricted parts supply from Thailand. But the automaker announced that the parts supply issues have been resolved to a certain level and hence hopes to normalize production from this month. A recovery in its production capacity will help replenish Honda's inventories in the U.S., which in turn will support its sales efforts.

Honda recently announced that it will launch several new Honda and Acura models over the next 24 months, which will help the company recoup the market share that it lost through 2011.

Moreover, Honda is aiming to become the industry leader in fuel-efficiency in every category of its vehicle line-up within three years. Also, by 2020, it aims to cut CO2 emissions across all its products by 30 percent, relative to emission figures for 2000.

To achieve these goals, Honda is targeting six different technologies, which include improvements to its diesel engine lineup, a two-motor hybrid system and electric powertrains. These initiatives will further support Honda's market share growth in the medium term.

You can drag the trend lines in the modifiable charts above to see the impact of these trends on Honda's stock value.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,778.15 +421.28 2.43%
S&P 500 2,061.23 +48.34 2.40%
NASDAQ 4,748.3960 +104.0840 2.24%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs