Honda says Japan sales target within easy reach

By Chang-Ran Kim, Asia autos correspondent

TOKYO (Reuters) - Honda will be able to easily reach its sales forecast of 640,000 cars in Japan for this business year thanks to brisk demand for its smaller models, a company official said on Thursday.

"A lot depends on market conditions, but we should be able to easily reach that target at the current pace," Hiroshi Kobayashi, deputy chief operating officer for Japanese sales operations, told a small group of reporters.

A few years ago, Honda had set a medium-term annual sales target of 800,000 cars but has chronically fallen short of goals set at the beginning of each business year.

Kobayashi said Honda's short-term mission would be to reach a stable annual tally of 700,000 cars, which he hoped could be achieved in about three years.

Honda has forecast flat sales in Japan's shrinking car market for the business year ending on March 31, 2009. In the first five months through August, its sales grew 0.8 percent to 233,044 vehicles, thanks to a 12 percent growth in cars excluding 660cc mini-vehicles. Second-half sales tend to be stronger in Japan.

Kobayashi said sales could be higher if more supply of the Fit -- also a hit in the United States -- and the Freed compact minivan, only sold in Japan, were available. Customers are waiting between two to three months for delivery of those models, he said.

Honda's U.S. sales fell 7.3 percent in the United States last month, better than the market's 16 percent plunge. For the year to date, its sales in the world's biggest market are up 1.2 percent.

But Kobayashi, who until March headed Honda's Canadian operations, said the car business in Japan was especially tough with overall demand falling year after year and consumers shifting towards smaller, lower-margin cars.