Side-by-side Civics: The chaotic Honda sell-off
Glut of old models led to big bargains
LOS ANGELES -- A proper sell-down of an aging nameplate is almost seamless on the showroom floor, a blend of marketing and incentives designed so only a handful of the old model remains when the new one arrives with a blast of publicity.
But reality gets in the way sometimes. Take the Honda Civic. The 2012 redesign that arrived in spring 2011 was panned by critics for its cheap-looking interior, carryover base engine and bland exterior styling. Honda was forced to throw big lease and interest-rate deals on the hood to move them. It also did a hurry-up of the midcycle change, arriving in December, about 19 months after launch.
But a funny thing happened. Once customers heard about the great deals on the '12, as early as last spring, they started flooding dealerships. Critical comments in the press be damned -- there were deals on the Civic to be had.
The Civic led the compact segment in 2012, beating the Toyota Corolla for the first time in recent years. As a result, dealers kept ordering more units, even when they knew the quick-turnaround restyling was on the way.
"It was a strange situation," said Art Wright, a Honda dealer in Lehigh Valley, Pa., since 1972. "It was panned by experts, but the consumers loved it. Some dealers were sorry to see the old one go. Those deals made them a pretty easy sell."
Because of dealer demand, Honda's Civic plant in Greensburg, Ind., had only a couple weeks of transition between going full-bore between the '12 and '13 models, rather than the gentle ramp-down plants usually have. Honda's Alliston, Ontario, plant declined to give the model year split of their production numbers.
That meant when the 2013s arrived in early December, there were still scads of 2012s on dealer lots. For consumers -- and salespeople in Honda showrooms -- that could present a confusing message: a 2012 Civic with a great deal, or a 2013 with no incentives at all.
Some companies do this all the time. But not Honda, where production management and inventory control are a blend of art and science.
In December, about 85 percent of the 33,118 Civic sales were of the '12 model. But that still left nearly 20,000 of the old model in inventory on Jan. 1.
By the start of February, Honda had pared the inventory of '12 Civics to about 8,000 remaining units, and by last week the old Civics were almost gone.
Civic sales were flat in January, compared to the previous January, and in February, they were down 16 percent year-on-year to 22,713. Introductions of some of 2013 Civic models, such as the Hybrid and Si sedan, were delayed, which crimped some dealer inventories in February, Honda spokesman Chris Martin said.
Martin admitted things could have gotten confusing on the showroom floor with side-by-side Civics, some with great deals and some with no incentives whatsoever.
Now, Honda salespeople, armed with the Civic they should have had all along, have to return to selling the car the way they traditionally have -- by hawking features and competitive benefits.
Consumers looking for a killer deal have missed their chance. Incentives per new Civic sold fell from $1,988 in February 2012 to $899 last month, according to TrueCar, and this year's number is as high as it is only because Honda was blowing out its remaining 2012s. And Honda officials say they will hold out as long as possible before putting any incentives on the 2013 model.
"There's a transition in sales methodology going on with dealers, going back to our traditional sales method of selling the Civic on merit," Martin said. "We're not spending nearly so much on special finance rates and lease deals."
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