Honda Low on Light Trucks – And That’s a Good Thing
Tuesday, May 4th, 2010Automotive News reports that Honda is having trouble keeping up with orders for light trucks, which, according to Executive Vice President John Mendel, is not a bad thing.
On Monday at the Moving Ahead sustainable transportation conference, Mendel said, “Light trucks seem to be growing pretty spry. We’re very short of inventory on the light-truck side, whether it’s Pilot or Ridgeline or Odyssey or CR-V. That seems to be growing for us and the industry. Demand seems to be stronger than the car side.”
Together, Honda and Acura posted a an April sales gain of 33 percent in American light trucks, as opposed to the same month last year. Total Honda sales increased by 13 percent last month, and there was an similar increase in truck sales over the first four months of this year, as compared to a 12 percent gain across the Honda-Acura company.
Nationwide, light truck sales had an overall increase of 24 percent in April and 15 percent for all of the first four months of the year, while vehicle sales in general improved 20 percent and 17 percent, respectively.
While sales have been increasing, inventories have been falling. As of April first, Honda averaged a 42-day inventory of trucks, down from 47 a month before, and had an average 56-day supply of all vehicles, down from 68 on March 1. Across the USA, light truck inventories stood at 53 days on the first of April, down from 66 on the first of March.
These impressive truck sales and smaller-than-average inventories have allowed Honda to keep consumer incentives small as well. Mendel said that Honda’s policy will continue to be minimal incentives, despite the incentive binge of arch-rival Toyota. Incentives are being offered for specific vehicles, however, like the Civic, which is currently in its fifth generation. But, Mendel said, “We don’t do 0 percent, we don’t do cash back, and that philosophy’s not changing.”
Mendel also said that Honda’s dealers are being cautioned to not overreact while sales improve from last year. He acknowledges that they probably will need to hire more salespeople, but shouldn’t “staff for Saturdays” (when peak shopping occurs).
“We’re saying don’t compare yourself to the last day you felt good, which was last year. Try to compare yourself to where you were in April, May of 2007, 2006, and try to focus on that in terms of, if you’re coming back, where should you be,” Mendel said. “Don’t go silly. It feels good, but don’t lose sight of the fact that we’re not where we were.”