Honda dealers ready for their first EV

LAS VEGAS — Honda highlighted its success and quick recovery in 2023 at the brand's make meeting with dealers Sunday at the NADA Show, and executives looked ahead to its next milestone: entering the electric vehicle market.

Lance Woelfer, assistant vice president of Honda sales, told Automotive News after the meeting that he laid out the near-future product road map that will kick-start the transition to electrification, including the Prologue midsize electric crossover.

"It's our first major volume BEV offering, and it really creates an opportunity for us to stave any defection that we've seen to brands like Tesla," Woelfer said, noting that the target demographic is Honda loyalists.

Not all dealers have had a chance to drive the Prologue, but members of what Woelfer called a "product committee" have tested it and gave positive feedback about the driving dynamics, saying the EV really feels like a Honda.

The Prologue will go on sale in March. Honda expects it to achieve sales of 40,000 in its first year, with the goal of eventually growing volume to 70,000 annually.

Overall, dealers are ready to start the transition to electrification

"Honda continues to see a lot of demand from our customers buying hybrids and other products for a number of years, but [they] are really wanting to buy a Honda BEV," he said.

"There are things happening in the market that some of our competitors have experienced, but we told dealers that Honda has a solid plan, and it will succeed," Woelfer said.

The Civic hybrid will join the lineup this summer and is a key part of Honda's strategy to increase hybrid sales. The compact sedan will also serve as a critical entry point for cash-conscious buyers, regardless of powertrain.

The HR-V subcompact crossover and CR-V compact crossover will also help Honda combat affordability concerns. The HR-V had nearly 12,000 sales in January, representing an increase of 49 percent, and the CR-V was up 32 percent to about 26,000 sales.

Woelfer said dealers also are seeing more consumer interest in midlevel trims compared with higher trims they may have bought in the past.

Now that production has recovered, Honda plans to keep inventory in check. Woelfer said that is a key focus for 2024 and that maintaining a 30 days' supply is ideal.

"We don't want to get to a situation where dealers are oversupplied and feeling burdened by the inventory, especially where their costs have increased — their interest rates, their floorplan," Woelfer said.

"We intend to balance production with our incentives — it's very important that we maintain a reasonable days' supply."