Honda Targets 90,000 HR-Vs Next Year

WOODSIDE, CA – Don’t take a 111 days’ supply as a sign demand for the Honda HR-V is waning, says a top U.S. Honda executive.

The brand remains bullish on the subcompact CUV and is targeting increased sales this year and even higher volume next year.

“We’re going to do a little over 80,000 (HR-V sales) this year, and we want to take it up a little over 90,000 (next year),” Jeff Conrad, group vice president-Honda Div. for American Honda, tells WardsAuto at a ’17 CR-V media preview here. “There are no plans for production cuts.”

Through October, Honda sold 64,866 HR-Vs in the U.S., up 92.3% from the vehicle’s introductory year of 2015, when 33,727 were sold in the January-October period.

When Honda launched the HR-V last year, it anticipated annual sales volume of 70,000 units in the U.S.

Conrad says the HR-V’s 111 days’ supply in late October is unusual and is the likely result of Honda CUV buyers being drawn to the discounted CR-V. The automaker is putting spiffs on the current-generation compact CUV as it sells it down ahead of the ’17 model’s December launch.

Demand for small CUVs is so hot that Honda’s year-to-date volume puts it in seventh place in WardsAuto’s Small CUV group.

Leading the pack is the discontinued Jeep Patriot, with 105,549 deliveries through October. Jeep’s year-old Renegade follows, with 84,494 sales. The other Jeep small CUV, the soon-to-be-redesigned Compass, is in third place with 79,123 deliveries.

The Subaru XV Crosstrek, the second best-selling small CUV in the U.S. last year, is in fourth place with 77,177 sales, while the Hyundai Tucson (73,421) and Kia Sportage (69,251) are the fifth and sixth best-selling models in the group in the U.S. through October.

General Motors’ Buick Encore (63,648) and Chevy Trax (62,802) are just behind the HR-V in eighth and ninth place in the Small CUV group.

The segment is about to get even more crowded, and competitive, as the two biggest automakers without a U.S. entrant, Ford and Toyota, launch new models soon. Ford’s EcoSport and Toyota’s C-HR were unveiled last week at the 2016 Los Angeles auto show.

CR-V, HR-V Supply Sufficient

Conrad says with two plants slated to build the HR-V for the U.S. – Honda’s new Celaya, Mexico, plant and its first plant in Mexico in El Salto – the automaker should be able to assemble 1,000 more units per month in 2017.

Honda is shifting CR-V production out of El Salto to Greensburg, IN, to make room for more HR-V builds.

The automaker also is expecting higher sales of the CR-V redesigned for ’17. In addition to Indiana, the CR-V will continue to be assembled at the East Liberty, OH, and Alliston, ON, Canada, plants.

Honda is calling for 360,000 CR-V sales this year, but not specifying a target for next year.

However, Conrad says it won’t be 400,000, the amount of RAV4s rival Toyota expects to move.

“We’re not forecasting that many,” he says. “We’re forecasting more than we’ll sell this year. We’re going to sell roughly 360,000, I think it is, this year. The intent is to go higher than that. We won’t tap out at 400,000 yet or anytime in the real near future, probably, but we have expanded capacity.”

When Honda launched the first-gen CR-V in 1997, the automaker’s light-truck sales were minor. This year it expects to hit a record amount thanks to the dominance of the CR-V, as well as the HR-V and Pilot.

The CR-V is the No.1-selling utility vehicle in the U.S., with 293,799 delivered through October, edging out the RAV4’s 286,809.

The CR-V’s volume also makes it the fourth best-selling light truck in the U.S. through October, following the fullsize-pickup triumvirate of the Ford F-Series (614,295), Chevy Silverado (475,324) and Ram (392,737).

“CR-V has had a critical impact on our business,” Conrad says.

To keep the CR-V on top, Honda says the redesigned ’17 model has a more powerful engine, more passenger and cargo volume, better interior materials and updated safety technology and infotainment.

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