News - Honda
Honda sales crimped by stock imbalance
Too many up-spec models and not enough price-busting base cars hinder Honda
6 Apr 2009
HONDA has revealed that it has been caught with insufficient stock of in-demand base-model cars.
A run on the popular base versions of the Jazz light car, Civic Sedan small car, four-cylinder Accord VTi and CR-V compact SUV means that stocks have been depleted for much of this year.
Honda’s decision to slash production at its Thailand plant in the wake of the global economic crisis has been at the centre of the stock shortages for Honda.
Honda Australia senior director Lindsay Smalley said the model mix coming from Thailand had to be changed.
“Now that we have seen the initial customer response to the financial crisis, our next challenge is to have the right model mix,” he said at last week’s launch of the new-generation Odyssey people-mover (which comes out of Japan, not Thailand).
Mr Smalley told GoAuto that it had plenty of stock of higher-end Jazz, Civic, Accord and CR-V models for customers to buy, and that it would implement special sales programs over the next few months to balance the heavy skew towards base-model demand.
From top: Civic, Accord VTi and CR-V (bottom).
However, large-scale driveaway-style deals and massive price cuts would not be part of the agenda.
“We will continue to run programs on our new vehicle sales to ensure our competitiveness,” he said. “But we certainly won’t be getting into distress selling mentality, actions that could damage our brand in the long term.
“We have two issues with stock.
“The first one is, particularly at the lower grades, we are almost out of stock … Jazz GLi, Civic VTi, base-model CR-V, Accord VTi.
“As certain areas of the market drop, sales of those types of cars have grown. So we have a model mix issue – healthy stock for the most expensive cars.
“Production constraints in Thailand (means) that we physically can’t get cars at the moment.
“In Thailand, they have built a new plant for the Australian market essentially, but that has been mothballed, and the other plant has gone from three shifts down to one shift with no overtime.
“And that’s most of the production for the Asian region – Jazz, Civic, Accord and CR-V.”
Mr Lindsay put a positive spin on Honda’s stock crisis, saying that it had managed to move quite a few high-line models during the last month or so, and that the company was now on more secure footing, considering the current economic situation.
“Our sales are off for March. But, historically … in relative terms, we are OK.
“And March for me was actually a remarkably strong month, because the majority of our stock was selling at the top end.
“But the positive is, our total stock – that is, at Honda and at our dealers – is really at a very manageable position.
“We would like more stock. But when there is less stock in these market conditions, we are in a much better position than if we were overstocked.”
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