Honda Tells Dealers to Be Ready for Market Comeback

Special Coverage

NADA Convention & Exposition

NEW ORLEANS – American Honda Motor Co. Inc. and its dealers hold a typically upbeat franchise meeting at the 2009 National Automobile Dealers Assn. convention here, despite the downturn in the economy and Honda’s 6.4% sales decline in 2008.

“It’s usually a very, very positive meeting,” says Carter Myers of Carter Myers Automotive, which counts Colonial Honda of Richmond, VA, among its stores. “To give you a measure of the satisfaction, there was not one question asked of the Honda executives,” he says of the hour-plus meeting Sunday.

On the topic of marketing funding, Honda tells dealers it will continue to be supportive. “I don’t think anybody believes they can buy the market,” says Myers, “but (the auto maker wants dealers to) make sure (they’ve) got market there when the opportunity arrives.”

Myers, a former NADA chairman, says Honda executives continue to show concern for their dealers in the current challenging U.S. economy.

“I think Dick Colliver (executive vice president) was candid in his discussions about the industry and what we’re all facing,” he says. “I think (Honda is) appreciative of the situation dealers are in (and) concerned with (dealers’) profitability (and) inventory status. There’s a real partnership that you don’t always find in a franchise-dealer relationship.”

Asked if credit-arm American Honda Finance Corp. is writing enough car loans, Myers says the unit has “always been more conservative than we’d probably like, but I don’t think we’ve seen any major changes in Honda Finance.

Honda Insight less about sales and more about image, one dealer says.

“They’ll buy people that deserve to be bought, and they don’t buy people that we wish were bought but probably don’t deserve (to be),” he adds, calling Honda Finance “consistent” in that respect.

True to form, Honda remains closed-mouthed about future product with its dealers. However, one topic of discussion at the franchise meeting was the already-announced Honda Insight hybrid-electric vehicle, which Myers says is less about sales and more about image.

“(Honda has) always been an environmental leader, and that car relates to what (the company) stands for,” he says in response to whether Honda’s ambitious sales goal of 100,000 units annually in North America is achievable given slow auto sales and low gas prices.

Meyers also says he isn’t worried about the lower estimated Environmental Protection Agency fuel-economy ratings for the Insight vs. the new Toyota Prius, noting automotive journalists who have driven the Insight have gotten “much higher miles per gallon.”

The Insight is estimated to achieve 40/43 mpg city/highway (5.8-5.4 L/100 km), while Toyota Motor Corp. estimates its ’10 Prius will have an average fuel economy of 50 mpg (4.7 L/100 km).

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