Honda HR-V Outrunning Sales, Conquest Projections

OAK BROOK, IL – For James Jenkins, good news is tempered with a bit of frustration.

Jenkins, manager-product planning for Honda Trucks, says the ’16 HR-V subcompact CUV has been a runaway best-seller far exceeding the automaker’s sales projections. That poses a problem car companies don’t mind too much but nevertheless want to remedy: inadequate capacity.

‟We figured sales would be good, but they’ve turned out to be really good,” Jenkins says here in an interview while Honda updates the Midwest Automotive Media Assn. on its light-truck lineup. ‟As soon as the truck arrives at the dealership there’s a buyer for the HR-V.

‟We estimated first-year sales of 70,000 HR-Vs and that’s way too conservative,” he says. ‟We’re looking at ways now to make more. Plant capacity is the question. We can’t make 100,000 HR-Vs the first year, but we’re looking at ways to make more.”

The update also covers the ’16 CR-V compact CUV, the fully redesigned Pilot SUV and, coming early next year, the next-generation Ridgline pickup and all-new Odyssey minivan. All are based on car platforms but offer all-wheel drive, putting them in the light-truck category – a segment that accounts for 55% of Honda sales, up from 52% a year ago.

Jenkins dismisses the suggestion that Honda meet HR-V demand by building more of them on the same line it shares with its platform-mate, the Fit car, at its new plant in Celaya, Mexico.

‟We plan to make more HR-Vs as soon as possible,” but not by cutting Fit output, he says.

‟The plant has only been open 1½ years and the quality is very good, but we can’t pull one vehicle (production) down to pull the other one up. HR-V sales are moving like a rocket ship, but Fit is also selling very well, too, so we have to look at ways to build more HR-Vs without shorting Fit.”

The HR-V is important to Honda because ‟the new-entry level CUV was designed as a conquest vehicle” to draw new buyers to the brand, Jenkins says. ‟The goal was conquest and about 50% of the buyers are conquests.”

While the HR-V is doing well, the slightly larger CR-V is doing even better with 163,018 sales through July, up 5.4% year-on-year, according to WardsAuto data. It is both the best-selling vehicle in Honda’s lineup and the industry’s top-selling CUV.

The CR-V, Jenkins says, ‟ doesn’t have the conquest rate that HR-V has, but it has the highest loyalty rate among our owners and 35% of those who buy a CR-V buy one again, which means one out of every three who owned one in the past come back to own one in the future.”

Both CUVs are selling so well he adds, ‟You probably won't find one on the lot at (rental companies) Hertz or Avis since 99% are being sold at retail, and that percentage is rising.”

As for additions to its CUV lineup, Jenkins says Honda for now is standing pat with a winning hand: ‟We’re happy with what we’ve got now. When you have a buyer for every one you build you couldn’t be happier.

‟We always look at the white space (in various segments) and the HR-V was the result of filling white space, but we aren’t going to do anything that would hurt demand for our core products.”