Honda has no regrets about F1 exit, still treading on thin ice: CEO+

TOKYO, Sept. 28 Kyodo -
With Honda Motor Co. remaining profitable on strong sales of its hybrid and
compact cars and with its former Formula One team inching closer to
championship, some motorsports fans might be raising the ''what if'' question
over its painful exit from F1 motor racing.

But Honda President Takanobu Ito said Monday the company has no regrets about
the withdrawal, emphasizing a bold and timely decision was necessary to shield
the automaker from the ongoing economic doldrums and prepare it for the massive
investments necessary for eco-friendly technology.
''We are still managing (our company) as if we were treading on thin ice,'' Ito
said in an interview with Kyodo News. ''The auto industry is still in great
fear.''
The chief executive of Japan's second-largest automaker said business
conditions continue to be challenging, citing risks like the foreign exchange
rate with the dollar falling to a nine-month low in the lower 88 yen range
Monday morning in Tokyo.
While a stronger yen erodes profits Japanese exporters make abroad, Ito said it
also increases the possibility of companies shifting their manufacturing bases
abroad to hedge risks from currency fluctuations.
''In order for Japanese automakers to remain in Japan and exercise their
leadership versus global carmakers, they need a certain number of manufacturing
bases here,'' he said.
Takeo Fukui, Ito's predecessor, announced Honda's decision to exit the F1
activities last December after auto demand was ravaged by the global recession.
But unlike its rivals, Honda has managed to remain solidly in the black on the
back of booming demand for its gas-electric Insight hybrid and thanks to its
focus on other fuel-efficient cars like the Fit compact.
''Even without the economic shock, cars have to change dramatically with the
rise in environmental consciousness,'' Ito said.
''We anticipate huge resource investments in the future,'' he added in
explaining why Honda could not delay its decision to exit the F1 motor racing.
In addition to its best-selling Insight hybrid, Honda plans to launch its CR-Z
hybrid sports car in Japan next February and a hybrid model of its Fit car by
the end of 2010.
''Hybrids are still in transition,'' Ito said. ''I have no doubt that (some
form of) a hybrid system will eventually be installed in all cars.''
Sources familiar with the matter have said Honda will introduce zero-emission
electric vehicles in the United States in the first half of the 2010s, but Ito
only said the company is ''thoroughly studying'' both EVs and plug-in hybrids.
On the strong performance of its former F1 team, now owned by British
motorsports engineer Ross Brawn and running on Mercedes-Benz engines, Ito said
he was ''grateful'' for the impressive results and for the smooth transition to
new ownership.
''We learned hard about the harshness of managing a (F1) team'' Ito said. ''We
need to make use of that (lesson) the next time we do it, if we ever return.''
==Kyodo