Honda says production of the acclaimed 2018 Accord is being reduced at its Marysville, Ohio, plant to combat inflated stockpiles.
Dealers around the country say a lack of enticing lease offers is a key reason for slower-than-expected sales of the reigning North American Car of the Year. Accord inventory levels stood at a 104-day supply on March 1 — high by any standards, let alone Honda's typical sparse count.
Henio Arcangeli Jr., senior vice president of the automobile division of American Honda Motor Co., said it's a "normal course of business" for Honda to tweak production levels in response to market demand. U.S. sales of the Accord are down 13 percent this year in a challenged midsize car segment that is down 15 percent.
Automotive News learned this month from a dealer source that Honda likely would trim Accord production, but this is the first time the automaker has confirmed the plans.
"There's a little bit more in the dealer channel than we would like, so we've started reducing our production a little bit to match inventory with what's going on in the marketplace," Arcangeli said after Honda's make meeting Saturday. "The true story here is we do this with all of our products all the time."
Arcangeli said the Accord is doing "very well" in some markets but admitted it's "struggling a little" in some lease markets. Those lease markets, according to dealers, include Florida, New York, Ohio and California. Sources said Miami-area dealers have turned down around 1,000 new Accords, and some California stores have done the same. A Midwest dealer told Automotive News recently that he'll consider cutting off Accord shipments if things don't improve in the near future.
Dealers are looking for incentive help, especially on the leasing side, but Arcangeli said it's not in Honda's nature to throw huge money at products to charge sales. Some competitors, notably Toyota and Nissan, have relied on fleet sales to boost midsize car shipments in recent months, a practice Honda eschews.
Dealers have griped that the rival Toyota Camry has more attractive lease deals than the Accord. Honda lists a standard three-year Accord lease on its website that calls for a $249 monthly payment with $3,199 down on the LX, its base trim, for well-qualified customers. But in Los Angeles, a Camry can be leased for $219 a month with $1,999 down. In Miami, the Camry deal is $199 per month with $3,198 down.
"Honda's principle is to develop leadership products, position correctly in the marketplace and support with great marketing," Arcangeli said. "The [Accord] has performed very well. The challenge has been that the overall midsize segment is about 15 percent lower than last year. There's also competitors that are spending close to $100 million a month on incentives, and that's not Honda's business model, and we're never going to do something like that."
Dealers leaving the meeting were tight-lipped about discussions with Honda management concerning the Accord, but one passing dealer told Automotive News it's a "great car" and that "we're going to work it out." a