Honda has reported increased profits as consumers shift their preference to smaller cars.

According to reports from Forbes, output of the firm's small size sedans including the Civic, Fit and Accord model, will increase by 25,000 units to meet demand.

Honda Executive Vice President Koichi Kondo said the company was cutting production of its large pickup trucks and other high fuel consumption vehicles.

He said production would drop by as much as 50,000 vehicles as consumers prefer to buy small sized vehicles.

Mr Kondo revealed that increasing the production of smaller vehicles was difficult considering "capacity bottlenecks".

One of Honda's next tasks will be resolving these problems and increasing consumer awareness about the environment and fuel efficiency.

Mr Kondo explained how the firm would finance the developments: "Procurement costs for such materials as steel and rare metals will increase by 125 billion yen from the initially budgeted amount."

Honda uses rare metals such as platinum, palladium and rhodium for catalysts used on their vehicles.

The technology is able to filter out carbon monoxide and particulate emissions.

Honda reported profits of $1.7 billion for the first quarter of the year.



Source:

Honda posts record Q1 profit on China demand, raises H1 outlook, 25.07.08
http://www.forbes.com/afxnewslimited/feeds/afx/2008/07/25/afx5253668.html