Thailand Flood Leaves Honda’s North American Production in Flux

North American launch plans for the next-generation Honda CR-V are on track, despite continued supply-chain disruptions caused by Thailand’s devastating flood, the auto maker says today.

And while Honda will “temporarily adjust” production for “the next several weeks” at its six assembly plants in the U.S. and Canada, the auto maker is dialing back on plans for an across-the-board 50% reduction in output.

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“Production rates will vary from plant to plant, but some plants will produce at rates above the previously announced 50%,” Honda says of cuts scheduled through Nov. 23 for its four U.S. sites, and Nov. 25 for its two Canadian plants.

However, in a bid to manage its parts supply, Honda has scheduled Nov. 18 as an additional shutdown day in North America. The auto maker previously announced it would not build vehicles Nov. 11.

In its statement today, Honda promises the all-important CR-V “will be launched on schedule in December.”

The auto maker has delivered 811,367 units to U.S.-market consumers between 2007 and 2010, more than any other CUV or SUV nameplate, according to WardsAuto.

The CR-V also has accounted for an escalating share of Honda-brand sales over the last three years: 15.4% in 2008, 18.3% in 2009 and 18.6% in 2010.

The impact of Thailand’s flood is particularly painful for Honda because it had begun to overcome the setback caused earlier this year when an earthquake and tsunami severed supply lines in Japan.

The auto maker rose to No.5 on the U.S. sales charts in October, one notch higher than its September finish that ended an embarrassing string of four consecutive double-digit declines in monthly year-over-year performances, according to WardsAuto data.

On the brand front, the auto maker’s core marque tallied 87,218 deliveries to place fourth in October for the first time since June. And the Honda Accord was the nation’s best-selling car, jumping three spots from its fourth-place September finish, the first time the Accord has topped the list since April 2010.

The Honda Civic was the U.S. market’s best-selling compact car in October.

Among light trucks, the Honda Odyssey minivan and the Pilot CUV finished 12th and eighth, respectively, but the CR-V passed the Ford Escape in sales to take the No.4 spot for the first time since April.

Through third-quarter, Honda production in North America totaled 755,939 units, lagging like-2010 by 19.4%, according to WardsAuto. Highlighting the shortfall’s impact, the auto maker says 87% of the vehicles it sold last year in the U.S. were assembled in North America.

“While the vast majority of parts and materials used to produce these products are purchased from suppliers in North America, a few critical electronic parts are sourced from Thailand and other regions of the world,” Honda says in a statement, adding it is “working closely with its suppliers in Thailand and throughout its global network to re-establish the flow.”

To lessen the impact of cancelled production, the auto maker says employees at its North American plants can report to work Nov. 11 and Nov. 18, or they can schedule vacation days on those dates. They also can book time off accordingly, without compensation or penalty.

“Honda deeply regrets any inconvenience this may cause to its customers,” the statement adds.

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