As Cars Go Electric, Honda Gases Up First New Mowers in 20 Years

(Bloomberg) -- Honda Motor Co. is racing toward an electric-powered and self-driving future for cars, but doubling down on gas-burning models for its U.S. lawn mower business.

The Japanese company is investing $46.4 million to expand a plant in Swepsonville, North Carolina, where it will begin producing its first new line of mowers in 20 years. Honda is counting on the next-generation HRN line of gasoline-powered mowers -- which boast 18% more torque but no improvement in fuel efficiency -- to turn around its money-losing global power equipment business.

“It's very important to our overall business, not just from a dollars standpoint but a reputation standpoint as well,” Will Walton, vice president of Honda's U.S. power equipment unit, said in an interview. “We have to make sure that this product is a success in the marketplace.”

The HRN family of 170 cubic centimeter engine-powered mowers will replace the current generation 160cc HRR line, he said.

Honda's power equipment business could use a boost. In the most recent fiscal year ended in March, the company said the division lost 10.9 billion yen ($102 million), marking a fifth straight year in the red. North America is by far its largest market, making up 39% of the 351 billion yen in global revenue from Honda brand generators, grass mowers, snow blowers and garden tillers.

Honda has sold a battery-powered autonomous lawn mover in the U.S. for the past two years, but the French-made Miimo model hasn't been a hit with American buyers, even though it can operate quietly day or night. While Miimo “is doing very well in the European market, it's a little more difficult for U.S. customers to get their minds around,” Walton said.

Honda committed in March to electrify 100% of cars sold in Europe by 2025 and last fall invested $2.75 billion in General Motors Co.'s robot-piloted car unit. Last month, the company announced plans for a shared car and SUV platform to help it reach a goal of making two-thirds of sales EVs by 2030. It eventually hopes to share those cutting-edge technologies across its divisions, including more yard care products. “You could see any combination of semi-autonomous and full autonomous in the marketplace,” Walton said.

But Honda has no immediate plans to add an electric-powered version of its popular push-mowers anytime soon, Walton said.

Honda's current annual production capacity in North Carolina is 2 million engines and the plant employs 750 full-time workers making lawn mowers, power washers and bush trimmers. The new investment gives it greater flexibility to potentially increase capacity by an unspecified amount, but Honda doesn't expect to add jobs, said Shane McCoy, a senior vice president at the factory.

The 35-year-old plant has helped Honda to adjust production quickly in the highly seasonal market for lawn care products, and the factory accounts for nearly 75% of the company's sales of power equipment in the U.S. Honda has escaped the brunt of the Trump administration's tariffs targeting China because the vast majority of the parts assembled in North Carolina are domestically sourced, McCoy said.

To contact the reporter on this story: Kyle Lahucik in Southfield at klahucik3@bloomberg.net

To contact the editors responsible for this story: Chester Dawson at cdawson54@bloomberg.net, Craig Trudell

©2019 Bloomberg L.P.