Honda Motor Co. told dealers they may resume ordering the Honda Fit and Insight as the automaker races to restock U.S. supplies of fuel-efficient models disrupted by the March earthquake in Japan.
Declaring that Honda has "turned the corner" on factory interruptions stemming from the March 11 earthquake, senior U.S exec John Mendel also exhorted dealers Thursday to be aggressive on the sales and advertising front.
"Honda's manufacturing operations in Japan are returning to nearly normalized levels by the end of summer," Mendel, executive vice president of American Honda Motor Co., said in a memo distributed to Honda Division retailers.
"This means our next allocation will include the fuel efficient Fit and Insight," Mendel said in the memo, obtained by Automotive News. "This represents a major improvement from the recovery timetable we provided you last month."
Following the earthquake, Honda halted Fit and Insight orders, citing a shortage of parts in Japan, where the models are assembled.
Dealers have been receiving Fits and Insights since the earthquake, but those shipments reflect orders placed before the quake.
Demand for smaller, fuel-efficient cars and light trucks has surged this year as U.S. consumers respond to higher fuel prices, putting more pressure on Honda and other automakers to rebuild stockpiles.
Mendel told dealers that "Pilot, Odyssey and CR-V will be the first to return to normal production levels with other models following.
"You can expect the monthly allocation at your dealership to improve and allow you to compete with any brand in the market," he said.
But he cautioned that because allocations will be based on sales rates this summer, "it is imperative that you keep your foot on the sales pedal."
Honda brand sales fell 22 percent in May, reflecting reduced inventories of imported and North America-built models. The uneven flow of Japanese parts to North American assembly plants since mid-March also crimped sales of the Accord and Civic, Honda's top-sellers.
Honda will continue to be hampered by limited output of Civic and Accord, and factories will focus on building the most-popular models: the Civic sedan and the 4-cylinder Accord sedan, Mendel told dealers.
"With this good news and a better than expected production recovery, there are good business reasons to utilize our comprehensive marketing and incentive support to 'turn the corner' and make June 2011 a successful sales month."
Other major automakers were hurt by the earthquake and tsunami in Japan, but Honda and Toyota Motor Corp. were particularly hard hit because of the proximity of their plants and suppliers to the disaster. At one point, Toyota warned the public that its vehicle output would be hindered until year end. It later improved that forecast.
Toyota brand sales fell 33 percent in May, and the industry as a whole declined by 4 percent.