Honda to Boost Crossover SUV Capacity
October 13 2016 - 11:10AM
Dow Jones News
Honda Motor Co. will rely on increased availability of crossover
sport-utility vehicles to continue its momentum in the U.S. market,
a top executive said at an event in Detroit.
John Mendel, head of the company's U.S. operations, said the
Japanese company's North American production plan is being altered
to increase output of a redesigned version of the popular CR-V that
goes on sale in the coming months. Once considered a niche
alternative to Honda's sedans, the CR-V is among the best sellers
in the entire American market, competing with the Civic as the
company's highest volume product.
Honda, long touting its strategy to have the flexibility at its
plants to allow immediate shifts in model mix, relies on
light-trucks for about half its U.S. volume. Accord, Civic and
other sedans make up the remainder. Mr. Mendel said Honda has lost
opportunities to gain more market share because of shortages of
certain light-truck models on dealer lots.
Dealers of Honda and other products have consistently said
buyers increasingly want SUVs and pickups amid cheaper gasoline,
and that shoppers are walking away from bread-and-butter sedans and
compact cars. Honda has in recent years revamped its Pilot SUV to
respond and recently reintroduced its Ridgeline midsize pickup
truck, but it has also seen strong demand for its redesigned Civic
small car.
The CR-V, competing with Ford Motor Co.'s Escape or Fiat
Chrysler Automobiles NV's Jeep Cherokee, is being retooled so that
it is slightly bigger than the model currently sold, and available
with more fuel-efficient options. Honda is moving CR-V production
out of Mexico to boost availability of the smaller HR-V crossover,
and will now have CR-V capacity in Indiana, Ohio and Ontario.
Mike Shaw, who owns auto dealerships in Colorado, Texas and
Louisiana, said his Honda stores are "definitely short" on certain
SUVs and sales of the new Ridgeline truck are brisk. He's
struggling to get enough supply of those vehicles to keep up with
demand.
"If the business would slowdown 10%, we'd be better off," he
said. "It's not terrible but there is a shortage."
While the overall U.S. light-vehicle market is up modestly over
2015's record pace, retail sales at dealerships have declined,
prompting some auto makers to rely more heavily on fleet sales.
Deliveries of pickups, vans, and SUVs, however, remain brisk on the
retail level and light trucks now represent nearly 60% of the
vehicles sold in America, according to Autodata Corp.
Mr. Mendel said Honda and General Motors Co. are the only auto
makers gaining steam on the retail-vehicles. Overall, Honda, Fiat
Chrysler and Nissan Motor Co. are the three companies among the
big-six sellers in the U.S. to gain market share on an absolute
basis in 2016. Mr. Mendel expects Honda to set U.S. sales records
in 2016 and 2017.
Christina Rogers contributed to this article
Write to John D. Stoll at john.stoll@wsj.com
(END) Dow Jones Newswires
October 13, 2016 10:55 ET (14:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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