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Honda names new CEO

Latest update : 2009-02-23

Honda Motors Co. has named Takanobu Ito (pictured) as new CEO. He will replace Takeo Fukui at the helm of Japan's second largest auto company. Fukui's performance in the industry is considered praiseworthy but he is nearing retirement age.

AFP - Japan's second-largest automaker Honda Motor Co., struggling with falling sales amid the global economic downturn, said Monday it would replace its president and chief executive officer in June.

Senior managing director Takanobu Ito, 55, will replace Takeo Fukui at the helm, the Tokyo-based company said. Fukui, 64, will remain on the board and serve as director and advisor to Honda Motor.

An industry analyst said the company had likely decided to replace Fukui because he is nearing retirement age rather than due to his performance, which is seen as praiseworthy.

Honda Motor is the only major Japanese automaker forecasting a profit for the current fiscal year to March.

But it said last month that its net profit had dived 89 percent in the October-December quarter and it plans to dramatically reduce production.

The company said that Ito would become its seventh president and chief executive following its annual shareholders' meeting set for late June. Ito joined Honda in 1978 and currently oversees its automobile operations.

Analysts noted that Fukui was nearing his retirement age and had managed to keep Honda in better shape than many rival carmakers.

"I don't think Fukui is stepping down to take responsibility for the current situation," said Tairiku Sakaguchi, an auto analyst at Shinko Securities.

"At the same time I have the impression (Honda) is trying to set up a new structure to defend itself amid current the business conditions."

"Honda's profitability amid the global downturn can be attributed to Fukui. While other automakers around the world are being hit by the slump, his ability to preserve profitability is praiseworthy," Sakaguchi said.

Honda last month reported a 5.1 percent drop in automobile sales in the quarter to December to 940,000 vehicles, but it said it was able to remain in the black, in part thanks to solid motorcycle sales.

"While Honda has slashed its annual earnings forecast and business conditions are expected to worsen, its earnings result will likely be better than those of other carmakers such as Toyota," Sakaguchi said.

Honda is not the only Japanese automaker changing its head during the deepening industry crisis. Toyota Motor last month named Akio Toyoda, the 52-year-old grandson of its founder, as its new president.

Automakers around the world have been hit hard by slumping demand as rising unemployment and a credit crunch deter people from buying cars.

Japanese carmakers have not been immune to the downturn, although they remain in better shape than their US rivals such as General Motors and Ford.

Yoichi Amano, head of the Japan Automobile Dealers Association, said Monday that domestic sales of vehicles excluding mini-vehicles could fall below three million units in 2009, the Kyodo news agency reported.

In 2008 sales fell to a 34-year low of 3.21 million vehicles, down from a peak of nearly 6.0 million units in 1990, according to the association.

Date created : 2009-02-23