Honda to Lift Output Of Top-Selling SUVs -- WSJ
October 14 2016 - 3:03AM
Dow Jones News
By John D. Stoll
Honda Motor Co. will rely on increased availability of crossover
sport-utility vehicles to continue its sales 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 on
Wednesday the Japanese company's North American production is being
altered to increase output of a redesigned version of the popular
CR-V that goes on sale in 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.
New-car dealers have consistently said buyers increasingly want
SUVs and pickups amid cheaper gasoline, and that shoppers are
walking away from their traditional 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, which competes with Ford Motor Co.'s Escape and Fiat
Chrysler Automobiles NV's Jeep Cherokee, is being retooled so that
it is slightly bigger than the existing model, and offers more
fuel-efficient options. Honda also is moving CR-V production out of
Mexico to make room for its smaller HR-V crossover, and will make
the CR-V at plants 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 said he is
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 this year is up
modestly over 2015's record pace, retail sales at dealerships have
declined, prompting some auto makers to rely more heavily on sales
to fleet customers like auto rental firms. Deliveries of pickups,
vans, and SUVs, however, remain brisk at retail and light trucks
now represent nearly 60% of the vehicles sold in America, according
to data provider Autodata Corp.
Mr. Mendel said Honda and General Motors Co. are the only auto
makers gaining steam in retail sales to individual customers.
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 2016.
Christina Rogers contributed to this article.
Write to John D. Stoll at john.stoll@wsj.com
(END) Dow Jones Newswires
October 14, 2016 02:48 ET (06:48 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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