SAN FRANCISCO -- If Honda dealers and the factory disagree on one thing, it's stair-step incentives.
The volume-based dealer-cash scheme to move inventory has Honda dealers miffed, and they let Honda management know it.
"We want to avoid using stair-steps," said Paul Ritchie, president of Hagerstown (Md.) Honda. "But they wouldn't take it off the table."
John Mendel, American Honda Motor Co. executive vice president, held a vote by applause in favor of and against stair-steps. The "against" camp of dealers was louder by a wide margin, said Dave Conant, CEO of Conant Auto Retail Group, which includes Norm Reeves Honda in Cerritos, Calif.
But Mendel did not back down from using stair-step incentives. He also said Honda will make a bigger push in leasing. But Honda will not use anything less than a 30-month term, despite some dealers' requests for 24-month deals from American Honda Finance Corp.
Honda unveiled plans for a patch to its antiquated MOVE vehicle-allocation software, hopefully in time for the CR-V launch in October. The patch should allow an extra day for trading of vehicles in dealer order banks before cars are shipped. But a broader redesign of the system should come in 2012, said Ron Theis, dealer advisory board chairman and president of University Honda in Corvallis, Ore. "There will be less reconfigurations of vehicles," he said.
Theis said Honda has established a committee with dealers to discuss owner loyalty initiatives, adding: "We need to think about how we reward our most loyal customers."