Honda brand stunned by dealers in survey due to low inventory

While NADA provided the top 10 winter survey finishers to Automotive News, a spokeswoman for the association declined to comment on the process or the results. Results from the summer 2022 survey are currently being presented to automakers and will likely be ready for public sharing in late fall, the spokeswoman said.

According to Honda spokeswoman Jessica Fini, low product availability is the main reason for the brand’s slippage from the top five. Supply shortages and logistical challenges have left inventory at record highs, with dealers experiencing “incredibly high turnover rates,” Fini said.

Bill Feinstein, president of Planet Honda in Tilton, NH, and general manager of Planet Honda in Union, NJ, as well as chairman emeritus of the Honda National Dealer Advisory Board, agreed.

“The big issue is product availability,” Feinstein said. Automotive News. “Honda dealerships are used to having a much higher level of throughput than other dealerships.”

Although Honda is typically among the top two brands in the industry in terms of throughput or annual new vehicle sales per dealer, “this has obviously been affected by product availability,” he said.

Honda moved from second to third place in the latest annual throughput rankings compiled by the Automotive News Research & Data Center.

Although Honda officials have said the brand will embrace a low inventory environment and maintaining a 30-day supply is optimal, Honda has been dogged by one of the lowest supply levels among brands. . At the end of August, Honda’s vehicle supply was in single digits.

“There has been some belief that Honda may have been more affected and slower to recover than others [manufacturers]“We all felt the pressure from the Koreans, who clearly didn’t have the same supply chain impacts that we had.”

Hyundai Motor Group, which includes the Hyundai, Kia and Genesis brands, is showing signs of recovery. Hyundai and Kia capped five months of declining sales with double-digit gains in August. Randy Parker, CEO of Hyundai Motor America, said inventories are improving and he expects plant production to increase 30-35% in the second half, which will help replenish dealer inventories. . Genesis set a record in August with 5,102 vehicles sold thanks to continued strong demand for crossovers.

Feinstein said he sees Honda’s shrinking market share as a concern. “It’s disconcerting for retailers because at the end of the day, we’re all competitive and we’d like to win,” he said.

Honda is working to meet the challenges under its control, Fini said, including “trying to provide better visibility into what we are capable of producing.”

While Feinstein called Honda’s communication candid, he said transparency could be a reason the brand is taking heat from dealerships. But transparency is better than painting a rosier picture, he added.

“A lot of these issues are not under Honda’s control. It only takes one, two or three suppliers for one issue to wipe out our production line,” Feinstein said. He noted that Honda’s supply chain in China has been problematic because that region has suffered so many pandemic-related lockdowns.

NADA’s summer attitude survey might yield similar results for Honda.

“I know Honda has taken steps to diversify its supply chain and use alternative suppliers, but it’s not something that can be solved in days, weeks or even months,” Feinstein said. “While I think they are making the right decisions in the long term, I can’t say it gives us much relief in the short term.”