Honda to Export Its U.S.-Made Cars to Taiwan

Honda, the first Japanese auto maker to open an assembly plant in the United States, is now poised to become the first to export cars from its new American plant back to Asia, company officials said Tuesday.

Honda, which has been expanding its U.S. manufacturing operations since it first started building cars here in 1982, may begin exporting Accord compact cars to Taiwan from its Marysville, Ohio, assembly plant by the end of the month, according to Honda spokesman Shinichi Tanaka.

If the Japanese company and its Taiwanese affiliate, Sanyang Industry Co. Ltd., can hammer out a final agreement on the project, Honda will ship between 1,000 and 2,000 Ohio-built Accords to Taiwan in 1987, with exports perhaps increasing in later years.

While such shipments are small, they would still account for as much as 2% of the tiny car market in Taiwan.

Sanyang, which produces Honda Civic subcompacts in Taiwan under license from Honda, approached Honda about a U.S. export deal after the Taiwanese government liberalized its auto import policies earlier this year. While Taiwan still prohibits all imports of fully built cars from Japan, it now allows imports of U.S.-built models, even those produced by Japanese “transplant” assembly plants here. As a result, Sanyang sought U.S. exports of Honda’s Accord models to supplement its smaller Civic line, Tanaka said.

But apart from the governmental restrictions in Taiwan, the dramatic rise in the value of the Japanese yen during the past year has also given Honda a new incentive to export from the United States rather than Japan. The costs of producing cars for export at Honda’s Japanese plants have risen to such an extent because of the yen’s rise that the Marysville complex is now on an equal cost footing with Honda’s Japanese facilities, Tanaka said.

Honda, which already exports motorcycles and lawn mowers from U.S. plants, will be shipping cars back across the Pacific at a time when most other Japanese car companies are just beginning to gear up their American manufacturing operations.

With a car and truck assembly operation in Tennessee, Nissan is the only other Japanese auto maker currently producing cars in its own plant in the United States. Toyota, the largest Japanese auto maker, has just begun building subcompacts for sale through its own dealer network at the General Motors-Toyota joint venture plant in Fremont, Calif. But the first U.S. assembly plant that Toyota will own and operate by itself is still under construction in Kentucky.

Meanwhile, Honda’s early gamble on U.S. car production has already paid off in the crucial American market, where Japanese auto makers reap virtually all of their worldwide profits.

In Japan, Honda remains a distant third in car sales behind Toyota and Nissan. But its steady supply of U.S.-built cars, supplementing imports still limited by quotas, has made Honda the best-selling Japanese nameplate in the United States so far in 1986.

It is also expected to hold on to the lead for the full year, surpassing Toyota for the first time. Through November, Honda had sold a total of 618,998 cars in the United States in 1986, including 210,316 U.S.-built models; Toyota, with only a few thousand U.S.-built cars on the market, had sold a total of only 565,549.