DETROIT - Honda Motor Co. is "studying" the idea of adding more capacity to its North American assembly operations.
Honda has come a long way since 1982, when it became the first Japanese automaker to open a "transplant" assembly line in the United States. Nearly all the passenger cars Honda sells in North America are now built here, and company officials hint that production capacity will grow as volume - and their model lineup expands.
The automaker has earned a reputation for innovation and reliability. But it's facing more challenges than ever, especially in the critical midsize market, where its Accord has long been a dominant player. At the same time, Honda is struggling to make up for a critical blunder, its late entry into the booming U.S. light-truck market.
For nearly a decade, Accord has been in a neck-and-neck battle with the Ford Taurus for bragging rights as the nation's best-selling passenger car. Taurus sales have slumped in recent months, but Honda missed its moment of opportunity to snatch the flag. Instead, the Toyota Camry slipped into first place, paced by a new model, lower prices and expanded production capacity.
"Right now it's an extremely tough battle in the midsize market," said George Peterson, chief analyst with the AutoPacific Group. "Honda is facing Toyota, which has its guns blazing."
The opportunity to catch Camry won't come until at least 1998, following the introduction of an all-new Accord. Industry analysts expect the new Accord to be a solid contender, but is that enough?
"Honda has always had good product, and when its competitors didn't, that was enough," said John Casesa, auto analyst with Wertheim Schroder. "But now the competition has gotten better and there isn't any more growth, so just making good cars isn't enough."
Along with the Camry, the Accord will face a newly restyled Nissan Altima, and Mitsubishi is updating its Galant. On the domestic side, Chrysler Corp. has all-new versions of its Concorde and Intrepid sedans on tap for the fall, and Ford aims to regain lost momentum by giving Taurus a face lift.
Honda of America's top U.S. executive, Senior Vice …