Inventory woes still plague Honda
March sales decline on shortages of popular trim levels
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NEW YORK -- Honda's disappointing March sales had some industry watchers scratching their heads. But executives say inventory woes are still to blame.
While the overall market rose 13 percent in April, American Honda sales fell 5 percent. The group was outsold by Chrysler Group, Nissan North America and the combined Hyundai-Kia Automotive group.
Honda Division fell 4 percent and was outsold by Nissan Division. Acura sales fell 12 percent and the brand was outsold by Buick and Audi and barely did better than Infiniti.
Honda executives say the reason is a shortage of vehicles stemming from last year's earthquake and tsunami in Japan, rather than a cooling of consumer sentiment toward the brand. Tetsuo Iwamura, CEO of American Honda, said the supply situation should be corrected by the end of April.
He said Honda and its suppliers have been slower getting back online than Toyota Motor Corp. Sales for Toyota Motor Sales U.S.A. were up 15 percent in March.
Still, Iwamura said the Accord's 15 percent sales decline in March was "not satisfactory." Sales of the sedan fell to 26,771 units and dropped to eighth among the best-selling passenger cars. The Accord will be redesigned this fall, and the build-out months could mean more low sales numbers.
But the problem was not just with the Accord. Despite the rush to fuel-efficient vehicles, Civic sales were off 10 percent from March 2011, while Fit sales fell 35 percent and Insight sales plummeted 63 percent.
Iwamura said demand for the Japan-built Fit and Insight in the home market -- where per-vehicle profits are higher because of the strong yen -- are crimping U.S. allocations. The same applies to the Civic Hybrid, the one Civic trim level still built only in Japan.
Honda Division's passenger-car supply stood at 58 days on March 1, while light-truck inventory was 36 days, according to the Automotive News Data Center. A 60-day supply is considered optimal. Iwamura said several nameplates are short of popular trim levels because suppliers of crucial parts are still in quake-recovery mode.
"We are still suffering through some inventory issues," said Mike Accavitti, American Honda's chief marketing officer. "We were at about 65 percent of where we would like to be at end of February. We don't have every model a customer wants or the inventory in the right places. We produced as much as we sold."
Trucks were the one bright sales spot for Honda. The newly redesigned CR-V compact crossover netted 30,868 sales in March, up 40 percent. It trailed only the Ford F series and Chevrolet Silverado among top-selling light trucks. Sales of the Odyssey minivan and Pilot SUV showed single-digit gains.
Iwamura also noted that several competing brands may have big fleet sales to thank for March gains. Honda traditionally sells only 2 percent of its volume to fleet customers. Meanwhile, Toyota said nearly 20 percent of the Camrys it sold in March went to fleets -- a reward to fleets for postponing orders last year during the post-quake crunch.
| Honda's bad month | |
| Honda Division sales slipped 4% in March, the only brand of the top 15 to decline year on year. These vehicles dragged down Honda's total. | |
| March 2012 unit sales vs. March 2011 | |
| Accord | –15% |
| Civic | –10% |
| Crosstour | –35% |
| Fit | –35% |
| Insight | –63% |
You can reach Mark Rechtin at mrechtin@crain.com. -- Follow Mark on 
