Honda says U.S. vehicle supply to improve by July

By @ibtimes on

Japanese automaker Honda Motor Co has adequate inventory of most models for the U.S. market but is running short of its high-volume compact Civic just as the summer sales season begins, the company told Honda and Acura dealers in a letter on Thursday.

The paucity of Civic sedans comes just as the U.S. auto market is shifting toward smaller, more fuel-efficient cars as gasoline prices hover near $4 per gallon for the first time since 2008.

Jesse Toprak, analyst with Edmunds.com, said on Thursday that thin inventories of Honda's Civic and Toyota Motor Corp's Corolla sedans in May and June open a door for General Motors Co, Ford Motor Co and Hyundai Motor Co to gain share in the U.S. small-car market.

In April, the Civic was the third-bestselling car in the U.S. market, behind only the Toyota Camry and Honda Accord. Car sales do not include the two best-selling vehicles so far this year, the Ford F-Series pickup truck and the GM Chevrolet Silverado pickup truck.

Honda told its U.S. dealers that vehicle inventory will reach a low point in June before allocations pick up in July.

John Mendel, Honda chief U.S. sales executive, said there is adequate inventory to continue to support Honda brand models that have made up 70 percent of U.S. sales so far this year.

In his letter to dealers, Mendel wrote, We have adequate inventory to continue to support approximately 70 percent of our vehicle sales year to date.

A Honda spokesman said that meant that models that make up 70 percent of Honda brand sales so far this year have good inventory levels.

Mendel told Honda brand dealers that July vehicle allocations to go out next week will be 11 percent higher than in June, and that Acura allocations will rise 15 percent over that period.

Honda's Japan plants have slashed production, but Mendel told dealers that the situation will ease soon.

We have all the confidence in our ability to increase our production in late summer, he said.

Gary Robinson, spokesman for the automaker's U.S. arm, said American dealers will have good inventory for all models but for Civic and those imported from Japan.

In his letter to dealers, Mendel said there is adequate inventory on hand to compete and win in the market for the Honda Accord sedan, the automaker's top-selling vehicle in the lucrative U.S. market.

Honda cars made in Japan are in short supply, including the subcompact Honda Fit and two lower-volume hybrid models, the Honda Insight and the Honda CRZ coupe.

There are 44 days' supply of Acura models in the U.S. market, and its Acura MDX and Acura RDX are at higher inventory levels than a year ago, Mendel told Acura dealers.

Acura models in short supply made in Japan are the small sedan TSX, the mid-size sedan TL and its flagship sedan RL.

(Additional reporting by Deepa Seetharaman; Editing by Richard Chang)

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