ORLANDO -- Honda dealers aim to improve their profit margins, increase conquest sales and keep their image separate from the tarring that Toyota has taken of late.
John Mendel, American Honda Motor Co.'s executive vice president, said the company will try to give dealers "more below the line" in terms of profit margins not visible to consumer Web sites.
"Whether it's CSI or service absorption [payouts], we're looking at doing something like Audi, where there's 6 percent [dealer discount], then another 5 percent below the line," Mendel said. "Volvo kicked these tires 20 years ago, and they're still doing it now."
One dealer, who spoke on the condition of anonymity, said Honda and dealers are concerned about being lumped in with Toyota in its current vehicle-recall woes, not only by the press but also by UAW lobbyists and the government.
In response, the company may begin a marketing and lobbying campaign to show the American presence of Honda, noting that 75 percent of the Hondas sold in North America last year were built here. Also, dealers may orchestrate a grass-roots effort with local governments to show the impact Honda dealers, suppliers and factories have on the economy, the dealer said.
After the make meeting, Forrest McConnell III, president of McConnell Honda in Montgomery, Ala., said Honda will continue its presence in leasing, helped by the brand's strong residual values. But because customers don't want to put as much money down these days, McConnell sees a restructuring of how deals are done.
Mendel said leases make up 25 to 28 percent of Honda's sales.
"Leasing for us is very efficient," he said. "Honda Accords have always been $199 a month."
Art Wright Jr., chairman of the Honda Dealer Advisory Board and owner of Lehigh Valley Honda-Hyundai-Suzuki-Acura in Emmaus, Pa., said Honda wants to reverse its 2009 sales slide with aggressive growth.
Mendel said that while Honda has stable prospects from a loyal buyer base, it looks to increase its conquest sales "without looking predatory."