LOS ANGELES -- Honda Motor Co. told its U.S. dealers it expects production to bottom-out this month before increasing in July and August, signaling that efforts to repair supply chains ravaged by Japan's March 11 earthquake and tsunami are gaining traction.
John Mendel, executive vice president of American Honda, told dealers in a memo Thursday to expect availability of vehicles built in July to increase 11 percent compared to June. Production is also expected to increase in August, Mendel said. Dealers will see the volume boost when allocations of July production are announced next week, Mendel said.
"As we have stated before, we hit our low point and we are now moving ahead with increased production capacity," Mendel wrote.
A Honda spokesman confirmed Mendel's memo to Honda dealers, but declined to elaborate on Honda's vehicle production schedules.
The announcement is a positive development for Honda dealers, who earlier this month watched rival Toyota Motor Corp. announce plans to ramp-up production sooner than expected.
Honda division sales were off about 33 percent in the first 10 days of May compared to the same period in May 2010, sources told Automotive News earlier this month. Mendel called Honda's sales pace through May 19 "relatively soft," and said that dealer concerns about inventory shortages were partly the cause for the slow start.
In the memo, Mendel encouraged dealers to remain positive, noting that while overall inventory is down compared with May 2010, supplies of some models are better than at this time last year.
Honda has more CR-Vs, Pilots and Fits in stock today than it did last year, Mendel said. Accord inventory, on the other hand, is lower than last May. Civic supplies are low, as damaged supply chains have hampered the production launch of the compact car's redesign.
Considering what Honda has in stock, plus incentives for vehicles with adequate availability, Mendel said dealers "need to continue to push hard on the sales front."
"We all know the automobile market is getting better and we want to be able to grow along with it," Mendel said.
