Honda adds U.S. overtime, sees slow sector rebound

By David Bailey

DETROIT (Reuters) - Honda Motor Co Ltd (7267.T: Quote, Profile, Research) has added U.S. overtime production to meet demand for its cars and crossovers but the automaker is braced for little sales growth in the U.S. auto industry next year, its top U.S. sales executive said this week.

"We have put some production back in, so we will continue to do that and adjust as we see the market go forward," Honda's John Mendel told the Reuters Autos Summit on Wednesday.

Honda, the No. 4 selling automaker in the United States, has seen its sales down 23.4 percent in 2009 through October, a bit better than the 25.4 percent U.S. industry sales decline.

The automaker has increased production of its CR-V crossover, Civic four-door sedan and Accord sedan with incremental additions at certain plants, Mendel said.

Honda has flexible manufacturing plants in the United States that allow it to add production readily when the inventory of vehicles drops too low. For example, three U.S. plants can build the high volume Civic compact car.

The automaker has added some occasional Saturday production at plants in Alabama and Ohio from late summer to meet demand and expects to continue that through the end of the year.

Honda took production out earlier in the year due to the industry slowdown and inventories have gotten pretty lean, Mendel said. At the end of October, overall inventory was at about a 40 days' supply and Honda prefers a range of 35 to 50.

U.S. auto industry sales were essentially flat in October with a year earlier, the best performance for the sector in a year outside of July and August when U.S. government "cash for clunkers" incentives boosted results.