Honda Sees Less Thai Flood Fallout in 2012

NEW YORK – American Honda has made big strides in getting vehicles to dealers, but nevertheless will end 2011 with volume down about 100,000 units from last year, says Mike Accavitti, vice president-marketing operations.

“We're not able to fill the pipeline as fast as we'd like,” he says.

Conquest sales of ’12 Civic belie low inventories.

But Accavitti reveals Honda will finish 2011 better than expected only a few months ago, when executives believed the brand would fall 200,000 units shy of their full-year forecast because of parts shortages resulting from the flooding in Thailand.

Civics and Accords are in short supply, but virtually all models are selling extremely fast, with Honda marketing. “We're selling them off the truck,” Accavitti says.

Honda's annual turn rate is 15 days this year, compared with normal turn rates of about 60 days.

“Our goal is to sell cars, not fill up dealer lots,” Accavitti says, predicting dealer inventories will recover in coming months.

The biggest drawback to below-normal inventory is not being able to supply the exact colors and trim customers may want.

Surprisingly, this has not impacted conquest sales, which are running at 55% in the case of the recently launched Civic.

The small inventories are creating better margins for dealers, but Honda still offers incentives on some models to remain competitive, Accavitti says.

However, most transactions are very close to sticker prices and dealers have not used supply shortages to justify higher premiums.