LO

VE

LYPROFESSIONAL UN IVERSITY

PUNJAB ( INDIA)

L

P

U

OVELY

ROFESSIONAL

NIVERSITY

2008

TERM PAPER OF

ESSENTIALS

OF MARKETING

Write product mix, product development

process, product differentiation strategy & all

marketing mix activities of HONDA CITY

AMIT KUMAR

BBA-MBA (3RD)

R346B51

30020070044 S U B M I T T E D T O - M S . S O N A L I P U N J

LOV ELY PROFESSIONAL UNIVERSITY

SUBMITTED BY:

AMIT KUMAR

BBA-MBA (3RD)

R346B51

3020070044

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BY AMIT KUMAR

CONEENTS:

Topic Pg. no.

Acknowledgement…………………………………………………4

Introduction of company………………………………………….5

History of company………………………………………………..6

Profile of company………………………………………………...7

Headquarter & logos……………………………………………...8

Corporate profile………………………………………………….9

Economic record & safety………………………………………10

Brands…………………………………………………………….11-12

Trends…………………………………………………………….13

Services……………………………………………………….......14-15

Honda product site………………………………………..14

Honda financial service…………………………………...14

For owners…………………………………………………15

Locate a dealer…………………………………………….15

Environmental leadership………………………………………..15-16

Honda thinking in a action………………………………..15

Environmental technology overview……………………..15

Environmental vehicles……………………………………16

Product development…………………………………………….16-18

Idea generation……………………………………………16

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Screening………………………………………………………16

Concept development & testing……………………………...16

Business analysis……………………………………………...17

Product & marketing mix development…………………….17

Market testing…………………………………………………17

Commercialization…………………………………………….18

Product development by Honda…………………………………….18

Honda jazz……………………………………………………..18

Production………………………………………………………18

Product mix…………………………………………………………....19

Product differentiation……………………………………………….19

Motorcycle……………………………………………………...19

Automobile………………………………………………..……20

Downhill mountain biking……………………………….……20

Honda jet………………………………………………………20

Marketing & sales…..………………………………………………..21

References…………………………………………………………..….22

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ACKNOWLEDGEMENT

No task is a single man’s effort Co-operation and Co-ordination of various people at various

places go into the successful implementation. It is a great pleasure to have opportunity to extend

my heart-felt thanks to everybody who helped me through the successful completion of this

project.

It would be prudent to commence this term paper with a sincere tribute to all those who played

an indispensable role in the accomplishment of this work and obliged whenever and wherever

their able guidance was required.

I would like to express my deep sense of gratitude to Ms. Sonali Punj, (Faculty guide) for

providing me regular guidance, full cooperation, support and encouragement throughout the

project. Under his experienced teaching and guidance, my knowledge has increased resulting in

achieving better results.

AMIT KUMAR

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HONDA

INTRODUCTION

Honda Motor Company, Limited is a multinational corporation, engine manufacturer and

engineering corporation headquartered in Japan.

The company manufactures automobiles, motorcycles, trucks, scooters, robots, jets and jet

engines, ATV, water craft, electrical generators, marine engines, lawn and garden equipment,

and aeronautical and other mobile technologies. Honda's line of luxury cars is branded Acura in

North America, Hondura in the Honduras and Hongda in China. More recently they have

ventured into mountain bikes.

Honda is the 5th largest automobile manufacturer in the world as well as the largest engine-

maker in the world, producing more than 14 million internal combustion engines each year. As

of August 2008, Honda surpassed Chrysler as the 4th largest automobile manufacturer in the

United States. Currently, Honda is the second largest manufacturer in Japan behind Toyota and

ahead of Nissan.

Honda is headquartered in 1-1, Minami-Aoyama Nichome, Minato, Tokyo, Japan. Their shares

trade on the Tokyo Stock Exchange and the New York Stock Exchange, as well as exchanges in

Osaka, Nagoya, Sapporo, Kyoto, Fukuoka, London, Paris and Switzerland. American Honda

Motor Co. is based in Torrance, California. Honda Canada Inc. is headquartered in the

Scarborough district of Toronto, Ontario, and is building new corporate headquarters in

Markham, Ontario, scheduled to relocate in 2008. Hero Honda, a joint venture between India's

Hero Group and Honda, is the largest manufacturer of two wheelers in the world. Honda of

Canada Manufacturing is based in Alliston, Ontario. Honda has also created joint ventures

around the world, such as Honda Siel Cars India Ltd, Hero Honda Motorcycles India Ltd,

Guangzhou Honda and Dongfeng Honda Automobile Company in China and Honda Atlas Cars

Pakistan.

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History of the company.

Honda Racing Corporation (HRC) was formed in 1982. The company combines participation in

motorcycle races throughout the world with the development of high potential racing machines.

Its racing activities are an important source for the creation of leading edge technologies used in

the development of Honda motorcycles. HRC also contributes to the advancement of motorcycle

sports through a range of activities that include sales of production racing motorcycles, support

for satellite teams, and rider education programs.

Soichiro Honda, being a race driver himself, could not stay out of international motorsport. In

1959, Honda entered five motorcycles into the Isle of Man TT race, the most prestigious

motorcycle race in the world. While always having powerful engines, it took until 1961 for

Honda to tune their chassis well enough to allow Mike Hailwood to claim their first Grand Prix

victories in the 125 and 250 cc classes. Hailwood would later pick up their first senior TT wins

in 1966 and 1967. Honda's race bikes were known for their "sleek & stylish design" and exotic

engine configurations, such as the 5-cylinder, 22,000 rpm, 125 cc bike and their 6-cylinder 250

cc and 380 cc bikes.

1979 saw Honda return to Grand Prix motorcycle racing with their exotic, monocoque-framed,

four-stroke NR500. The NR500 featured elongated cylinders each with 8 valves and with

connecting rods in pairs, in an attempt to comply with the FIM rules which limited engines to

four cylinders. Honda engineered the elongated cylinders in an effort to provide the valve area of

an 8-cylinder engine, hoping their four-stroke bike would be able to compete against the now

dominant two-stroke racers. Unfortunately, it seemed Honda tried to accomplish too much at one

time and the experiment failed. For the 1982 season, Honda debuted their first two stroke race

bike, the NS500 and in 1983, Honda won their first 500 cc Grand Prix World Championship with

Freddie Spencer. Since then, Honda has become a dominant marque in motorcycle Grand Prix

racing, winning a plethora of top level titles with riders such as Valentino Rossi and Mick

Doohan.

In motocross, Honda has claimed 6 million motocross world championships. In the World

Enduro Championship, Honda has won six titles, most recently with Stefan Merriman in 2003

and with Mika Ahola in 2007 and 2008.

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PROFILE:

Type: Public

(TYO: 7267) & (NYSE: HMC)

Founded September 24, 1948

Founder(s) Soichiro Honda

Headquarters Minato, Tokyo, Japan

Area served Worldwide

Key people Satoshi Aoki (Chairman)

Takeo Fukui (CEO)

Industry Automobile

Truck manufacturer

Motorcycle

Products Automobiles, trucks, motorcycles, scooters, ATVs,

electrical generators, robotics, marine equipment,

jets and jet engines, and lawn and garden

equipment. Honda and Acura brands.

Market cap US$ 58.74 Billion (2008)

Revenue ▲ US$ 119.801 Billion (2008)

Operating income ▲ US$ 9.513 Billion (2008)

Net income ▲ US$ 5.989 Billion (2008)

Total assets ▲ US$ 125.916 Billion (2008)

Total equity ▲ US$ 45.356 Billion (2008)

Employees 167,231 (Sep 2008)

Website Honda.com

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AOYAMA BUILDING. HONDA’S HEAD OFFICE

LOGO OF HONDA’S POWERSPORTS LOGO OF HONDA’S AUTOMOBILE.

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CORPORATE PROFILE

Honda Motor Co., Ltd. operates under the basic principles of "Respect for the Individual" and

"The Three Joys" — commonly expressed as The Joy of Buying, The Joy of Selling and The Joy

of Creating. "Respect for the Individual" reflects our desire to respect the unique character and

ability of each individual person, trusting each other as equal partners in order to do our best in

every situation. Based on this, "The Three Joys" expresses our belief and desire that each person

working in, or coming into contact with our company, directly or through or products, should

share a sense of joy through that experience.

In line with these basic principles, since its establishment in 1948, Honda has remained on the

leading edge by creating new value and providing products of the highest quality at a reasonable

price, for worldwide customer satisfaction. In addition, the Company has conducted its activities

with a commitment to protecting the environment and enhancing safety in a mobile society.

The Company has grown to become the world's largest motorcycle manufacturer and one of the

leading automakers. With a global network of 501 subsidiaries and affiliates accounted for under

the equity method, Honda develops, manufactures and markets a wide variety of products,

ranging from small general-purpose engines and scooters to specialty sports cars, to earn the

Company an outstanding reputation from customers worldwide.

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ECONOMIC RECORD

With high fuel prices and a weak US economy in June 2008, Honda has reported a 1% sales

increase while its rivals including the Detroit Big Three and Toyota have reported double-digit

losses. Analysts have attributed this to two main factors. First, Honda's product lineup consists of

mostly small to mid-size, highly fuel-efficient vehicles. Secondly, over the last ten years, Honda

has designed its factories to be flexible, in that they can be easily retooled to produce any Honda

model that may be in-demand at the moment. Honda's sales were up almost 20 percent from the

same month last year. The Civic and the Accord were in the top five lists of sales.

SAFETY

Safety of passengers and pedestrians is a first priority for Honda. With the new City, safety

features are now a standard offering across the entire range of Honda in the Indian market The

new Honda City comes fully loaded with various active and passive safety features including

ABS (Anti-Lock Braking System) with Brake Assist (BA), Dual SRS airbags, pre-tensioner seat

belts and G-CON (G-Force Control Technology) body with a crush-proof survival zone. The

front body structure of the new Honda City ensures advanced pedestrian safety features.

The all new City features an Advanced Integrated Audio System - which is the world’s first car

audio exclusive to digital media. This advanced Audio system offers consumers the liberty to

integrate with any of the newer technologies like iPod, MP3player, USB Memory, cell phone

with MP3 Player. The system promises a high quality sound with advanced functionalities. The

audio system comes with steering mounted controls & separate remote control.

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BRANDS.

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These are Honda's aggressive recent trend of offering a whole lot more for a little bit less since

the Civic, technologically, ergonomically wise, the New City could even rival that of the new

Toyota Corolla, discounting interior room of course.

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TRENDS

A regular trend that started on the Fourtrax that would not carry over to the four strokes was the

use of aftermarket frames. Stock frames on most mass produced quads are made of mild steel

and, though suitable for recreational use, will quickly develop cracks when raced. Without new

quads available after the 1989 model year, stronger replacement frames for racing were soon

needed. The first aftermarket frame for the 250R was made by dirt track motorcycle chassis

builder, C&J in 1991 for CT Racing. This frame was a direct replacement for the original,

maintaining stock suspension geometry. The first altered geometry frame was introduced by JP

Racing a short while later. This design brought the front suspension mounts in one inch on each

side, allowing the use of longer suspension arms in competition, which increased wheel travel

and improved the ride qualities. By 2003, a myriad of aftermarket frames could be had from

numerous manufacturers in both stock and altered geometry, made of steel and aluminum. Lone

Star Racing produced a titanium frame, but AMA rules prevented its use in competition.

Though Honda was initially concerned with reliability and detuned the original 250cc motor,

with the release of the Pro-X (pro-cross) cylinder and head in 1994, the 250R’s displacement

could be increased well into the 300cc range by changing the cylinder alone. Additionally, this

and other aftermarket cylinders offered advanced port layout for more tuning options. With

modifications to the transmission cases, later aftermarket cylinders and crankshafts permitted

engine displacements to reach 500cc’s. The last version of the Pro-X cylinder, as well as others,

also added an exhaust operated power valve, a feature that was left off the 250R but used almost

universally by the competition, as well as in Two-Stroke motocross bikes since the mid-eighties.

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services

From automobiles to finance, Honda has a wide array of products and services to accommodate

your needs. Take a look around and see how our innovative thinking can make your life better.

a) Honda Product Web Sites

Whether you want to request a quote, locate a dealer or just be kept in the know about anything

related to Honda, every Honda site is dedicated to meeting your needs. Check out the links below

to get more information on Honda and Acura automobiles, Powersports, HondaJet, Power

Equipment, Marine and Engines.

Honda Automobiles

Acura Automobiles

Honda Powersports

HondaJet

Honda Power Equipment

Honda Marine

Honda Engines

b) Honda Financial Services

If you're looking to purchase or lease a Honda product, Honda Financial Services can help.

Browse special lease and finance offers, estimate payments and even get credit pre-approval if

you apply online. Current customers can learn how to pay bills online and over the phone, sign

up for online account access or sign up to make payments automatically. And it's always a good

idea to learn about your future financial options if you're approaching the end of your financial

contract. In addition to different bill payment methods, Honda Financial Services offers online

account access through our Owner Link web site, to find out about payoff information, whether

you have a lease or traditional financing.

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c) For Owners

Owner Link members have access to personalized services, such as maintenance schedules,

recall information and online payment. Sign up now, and you can see important tips on caring for

your Honda, information on warranty coverage and details about Honda genuine auto parts. Get

the most out of your Honda today.

d) Locate a Dealer

Use the dealer locator to find the address of and directions to your local Honda dealer. Simply

enter your address, and we'll provide you with information for any Honda dealer nationwide.

Environmental leadership

Honda thinking in action

Honda's legacy of innovation is unmatched in the automotive industry. As always, our

attention is focused on the future. For example, select California drivers are now driving the

FCX Clarity fuel cell vehicle. It's all part of Honda thinking in action.

Environmental Technology Overview

Honda has always targeted mass-market models in order to have the greatest impact on clean

air and fuel economy. To this end, we work to improve existing technologies while using The

Power of Dreams philosophy to envision and develop the vehicles of the future.

We believe it is important to invest in the continued advancement of internal combustion

engine technology. Honda has introduced a new generation of gasoline engines around the

world that have extremely low emission levels and increased fuel efficiency while

maintaining the ability to improve driving performance.

Further in pursuit of our goal to improve energy efficiency, we have developed gas-electric

hybrid vehicles that achieve ultra-high fuel economy. This includes the Insight, the first

mass-market car with hybrid power.

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Environmental Vehicles

When it comes to talking about the environment, we let our products speak for themselves. In

1974, Honda introduced the ingeniously simple Civic CVCC engine. World-changing for its

fuel efficiency and low emissions, the CVCC demonstrated our spirited commitment to

environmentally responsible technology. Many other firsts were to follow, such as the first

hybrid vehicle sold in North America and the first government-certified fuel-cell car. This

legacy of innovation and acting on our beliefs is seen in every Honda product, from the Civic

GX Natural Gas Vehicle, the FCX Clarity Fuel Cell vehicle, and the Civic Hybrid.

Product development

Idea Generation

The first step of new product development requires gathering ideas to be evaluated as potential

product options. For many companies idea generation is an ongoing process with contributions

from inside and outside the organization. Many market research techniques are used to

encourage ideas including: running focus groups with consumers, channel members, and the

company’s sales force; encouraging customer comments etc.

Screening

In Step 2 the ideas generated in Step 1 are critically evaluated by company personnel to isolate

the most attractive options. Depending on the number of ideas, screening may be done in rounds

with the first round involving company executives judging the feasibility of ideas while

successive rounds may utilize more advanced research techniques. In this point our company

screens out the idea of developing the new product. Acceptable ideas move on to the next step.

Concept development and testing

With a few ideas in hand the marketer now attempts to obtain initial feedback from customers,

distributors and its own employees. Generally, focus groups are convened where the ideas are

presented to a group, often in the form of concept board presentations (i.e., storyboards) and not

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in actual working form. During focus groups with customers the marketer seeks information that

may include: likes and dislike of the concept; level of interest in purchasing the product;

frequency of purchase and price.

Business and analysis

At this point in the new product development process the marketer has reduced a potentially

large number of ideas down to one or two options. Now in Step 4 the process becomes very

dependent on market research as efforts are made to analyze the viability of the product ideas.

Much effort is directed at both internal research, such as discussions with production and

purchasing personnel, and external marketing research, such as customer and distributor surveys,

secondary research, and competitor analysis.

Product and marketing mix development

Ideas passing through business analysis are given serious consideration for development.

Companies direct their research and development teams to construct an initial design or

prototype of the idea. Marketers also begin to construct a marketing plan for the product. Once

the prototype is ready the marketer seeks customer input. In addition to gaining customer

feedback, this step is used to gauge the feasibility of large-scale, cost effective production for

manufactured products.

Market testing

Products surviving to Step 6 are ready to be tested as real products. In some cases the marketer

accepts what was learned from concept testing and skips over market testing to launch the idea as

a fully marketed product. But other companies may seek more input from a larger group before

moving to commercialization. The most common type of market testing makes the product

available to a selective small segment of the target market (e.g., one city), which is exposed to

the full marketing effort as they would be to any product they could purchase.

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Commercialization

If market testing displays promising results the product is ready to be introduced to a wider

market. Some firms introduce or roll-out the product in waves with parts of the market receiving

the product on different schedules. This allows the company to ramp up production in a more

controlled way and to fine tune the marketing mix as the product is distributed to new areas.

Product development by Honda

When Honda launched his new product in 2001 (Honda jazz), which is also called Honda fit they

think about the product as a demand. They analyze about the market to launch it.they used the

market testing in some of the country.

These are the basic information about HONDA FIT or HONDA JAZZ.

The Honda Fit, also called Honda Jazz, is a five-door hatchback subcompact produced by Honda

of Japan that was first introduced in June 2001. The vehicle is known as the Fit in Japan, China,

and in both North and South America. It is called the Jazz in Europe, some parts of Asia,

Australia, Oceania, the Middle East, and Africa.

Production

The Fit is produced in 5 factories throughout the world. Suzuka (Japan), Sumaré (Brazil),

Guangzhou (China), Ayutthaya (Thailand), and Karawang (Indonesia). Models produced in

Japan are for Honda's home market, exported to Europe, some Asian markets, as well as Canada

and the United States. The Brazilian factory supplies all of Latin America and the Caribbean.

Chinese models are sold in mainland China and also exported to some left hand drive European

markets, while Jazz models in Hong Kong are made in Japan.

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Product mix

The product mix of a company, which is generally defined as the total composite of products

offered by a particular organization, consists of both product lines and individual products. A

product line is a group of products within the product mix that are closely related, either because

they function in a similar manner, are sold to the same customer groups, are marketed through

the same types of outlets, or fall within given price ranges. A product is a distinct unit within the

product line that is distinguishable by size, price, appearance, or some other attribute. For

example, all the courses a university offers constitute its product mix; courses in the marketing

department constitute a product line; and the basic marketing course is a product item. Product

decisions at these three levels are generally of two types: those that involve width (variety) and

depth (assortment) of the product line and those that involve changes in the product mix occur

over time.

Product mix of Honda

Honda Company is using to produce every item of the automobile. They don’t require any other

company to produce any item for their products. They are producing breaks, seats, engine, body

as well as wheel also.

Product differentiation

In marketing, product differentiation is the process of distinguishing the differences of a product

or offering from others, to make it more attractive to a particular target market. This involves

differentiating it from competitors' products as well as one's own product offerings.

Product differentiation by Honda

Motorcycle

Honda Racing Corporation (HRC) was formed in 1982. The company combines participation in

motorcycle races throughout the world with the development of high potential racing machines.

Its racing activities are an important source for the creation of leading edge technologies used in

the development of Honda motorcycles. HRC also contributes to the advancement of motorcycle

sports through a range of activities that include sales of production racing motorcycles, support

for satellite teams, and rider education programs.

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Automobile

Honda entered Formula One as a constructor for the first time in the 1964 season at the German

Grand Prix with Ronnie Bucknum at the wheel. 1965 saw the addition of Richie Ginther to the

team, who scored Honda's first point at the Belgian Grand Prix, and Honda's first win at the

Mexican Grand Prix. 1967 saw their next win at the Italian Grand Prix with John Surtees as their

driver. In 1968, Jo Schlesser was killed in a Honda RA302 at the French Grand Prix. This racing

tragedy, coupled with their commercial difficulties selling automobiles in the United States,

prompted Honda to withdraw from all international motorsport that year.

Downhill mountain biking

Honda has also built a Downhill racing bike, known as the Honda RN-01. Honda has taken on

several people to pilot the bike, among them is Greg Minnaar. The team is known as Team G

Cross Honda. The key feature of this bike is the gearbox, which replaces the standard Derailleur

found on most bikes.

Honda Jet

Honda has also pioneered new technology in its HA-420 HondaJet that allows new levels of

reduced drag, increased aerodynamics and fuel efficiency thus reducing operating costs.

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Marketing

Honda's official slogan is "The Power of Dreams". They never used this slogan to sell their

products. Mr. Honda's belief that well built products will sell themselves. Many of Honda's most

remarkable advertising campaigns have been released for the UK market, and have not been

broadcast in North America except on the internet

Honda Australia started promoting the Honda Jazz with Village Green, an animated television

commercial, in 30 second and 60 second versions. The 60 second ad was inspired by Thomas the

Tank Engine. The campaign was developed by Foote Cone Belding Melbourne, by creative

director/art director Scott Lambert, copywriter Mark Ringer and agency producer Mandi Wright.

The animated ad was directed by Michael Cusack at Anifex, with director of

photography/producer Richard Chataway.

In 2006-04-20, American Honda and its ad agency RPA launched the all-new small car, the

Honda Fit, with six 5-second and two 30-second TV ads, with the slogan 'The Fit Is Go'.

In 2008-09-24, RPA (Rubin Postaer and Associates) announced it had started a national

advertising campaign for Honda Fit, beginning Sept. 29. The list of ads include "Mecha-

Mosquitoes," (broke 9/21) "Defense Mechanism" (breaks 10/2) and "Bats" (breaks 9/28),

produced by Digital Domain. As part of the campaign, the vehicle also appeared in Gossip Girl,

90210, America’s Next Top Model, Smallville and Everybody Hates Chris. Print ads "Gas Hogs"

and "Cavernous" will be featured in popular magazines. A dedicated marketing site,

http://fit.honda.com/ , was built to communicate top product features through games and

interactive experiences. The campaign continued the 'The Fit Is Go' slogan. The TV ads editor

was Michael Heldman at Spot Welders, Santa Monica, with producer Lisa English; sound was

designed by Eddie Kim at 740 Sound Design, Santa Monica; audio post production was mixed

by Loren Silber at Lime Studios, Santa Monica; music was composed by Jonathan Elias and

David Wittman at Elias Arts, Santa Monica with producer Ann Haugen.

Sales

On 17 July 2007, Honda announced that more than 2 million Fit/Jazz units had been sold

worldwide since its introduction. Japan accounts for the largest percentage of sales, with 962,000

units sold in the home market. Europe is next with 417,000 units. The U.S. accounts for 77,000

cars since introduction in 2006. Honda expected to sell 33,000 vehicles in the U.S. for the 2007

model year, but exceeded these expectations and sold 40,000. Honda plans to put 70,000 Fits on

the U.S. roads for the 2008 model year.