Honda Expects to Make Up Lost Output; OK With February Sales Results

MIAMI BEACH, FL – Honda lost about 25,000 units of North American production due to the recent work slowdown at U.S. West Coast ports.

But Jeff Conrad, the Honda brand’s U.S. general manager, expects that volume to be made up easily.

“Spread across the number of plants (we have here), it’s not a huge number,” he tells WardsAuto during a Honda HR-V media preview. “We plan to make that up, but I can’t give you an exact timeframe.”

The slowdown impacted cargo shipments of electronic components to Honda from overseas suppliers and reportedly sliced 20,000 vehicle builds from Honda’s plans the week of Feb. 16. Production of another 5,000 units was lost last week.

Conrad says as of Feb. 25 Honda had just two plants not back to full production: its Greensburg, IN, operation, responsible for Civic sedan, hybrid and natural-gas models for North America, and Line 1 at Honda’s Alliston, ON, Canada, facility, which also builds the Civic.

Conrad says those plants were running just a few days shy of full production as of last week and reportedly will return to full speed this week.

Honda can stand to lose some Civic output, as days’ supply of the car – and cars in general in the U.S. – remains higher than normal as Americans increasingly embrace CUVs and other light trucks.

WardsAuto January inventory data put U.S. days’ supply of the Civic at 117, up from 76 in December and 80 year-ago. The industry average days’ supply for cars last month was 85, up from 64 in December, but down from 94 in late January 2014.

For more in-demand models built in Alliston, as well as at Honda’s East Liberty and Marysville, OH, plants, the automaker partially blunted the impact of the slowdown by air-lifting parts.

While Honda has some experience in recent years with parts shortages, due to the Asian natural disasters of 2011, Conrad says the port slowdown was instructive.

“As we get closer to a situation where there may be a work slowdown, (we need to) try to assess how that’s going. Is it going to manifest itself into something bigger, (and) what are the components (involved)?”

Meanwhile, he says Honda’s February sales were looking good heading into last weekend, despite the frigid, snowy conditions impacting much of the country.

“Yes, we’re experiencing a tougher time getting traffic into our dealerships,” he says. “When it’s -4°, people tend to stay indoors unless they absolutely need to go outdoors and shop, no matter what that particular product is.”

Of Honda’s 11 U.S. sales zones, those in colder climates were running behind their goals prior to the weekend, he says.

However, based on its midmonth forecast, Honda expects February sales to be acceptable.

“We’re looking to be somewhere between even and up 5% from last year, knowing how we thought the month was going to go,” Conrad says. “And we’ll take that. That’s not bad.”

Automakers report U.S. sales tomorrow. The Honda brand sold 88,860 units in February 2014, which was down 8.0% on a daily basis from February 2013.

Honda started off 2015 well, with record sales for the month of January, 90,202, up 7.3% on a daily basis.

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