Honda: Dealers stand by brand as inventory issues linger

What is Honda telling dealers about the price increase?

As long as it sells vehicles at MSRP, Honda takes the position that dealers need to run their business responsibly and in a way that is good for their customers.

As far as I know they have not taken any disciplinary action against dealers charging over MSRP. I think there is a difference in charging more than MSRP for “market value.”

I certainly think the latter is a concern because it’s something consumers hate so much and I can certainly understand why.

What about Honda dealer profitability? How sustainable are current vehicle margins and profitability levels as inventory levels improve?

2021 was a record year, not just for Honda dealerships, but for all dealerships. 2022 was a good year, [but] In the last 60 days or so, we’ve started to put some pressure on front-end gross. I expect that to continue through 2023, and I wouldn’t be surprised if it might return to historical standards by late 2023. Clearly, that would affect profitability. [2023] — [after] Over the last 2 years – all dealers have been sluggish, which could have a big impact on fixed operations [units in operation].

How have Honda’s sales incentives changed during this time of reduced production?

Honda is more strategic with incentives, with a focus on retaining loyal customers rather than conquering business. But again, as markets and inventories normalize, my guess is that [manufacturers] We need to get back to some incentive spending to attract customers.

Honda is planning an EV in 2024, but there is a perception that it still lags behind its rivals in electrification. What are dealers saying about Honda’s EV timeline?

Over the next two years, a huge number of EVs will hit the market. The real question is, is that really the car consumers want today and are willing to pay a premium for an EV? Honda and Toyota, both of which have been criticized for moving slowly with EVs, either look great or look stupid. Honda’s overall push for EVs seems like a good move, as it won’t materialize until it launches its own e:Architecture based on solid-state technology. long run. When they bring their own EV to market, I expect them to be the tech leaders. They jump a bit over current technology, which is somewhat hindered.

Honda’s first EV, the Prologue, is born out of a collaboration with GM. How do Honda dealers feel about the partnership?

Honda [has] We have had quite a few technical collaborations around the world on various items and have collaborated with General Motors in the past from a technical perspective. Honda may be a little late with his EV launch, but GM is certainly in the forefront.So I think there are some advantages for Honda to work with the leaders and enter the market until their own technology is ready. [the EV] It will be a vehicle with a badge. All we hear from Honda is that while the battery system and architecture are the same as GM’s, it’s still Honda from a design and drivability standpoint.

Sony Honda Mobility, a joint venture between Honda and Sony, has announced that it will manufacture jointly developed EVs at Honda plants in North America by 2026. Has there been any discussion among US dealers about it?

Dealers are, of course, concerned about ventures that could compete with the billions of dollars invested in our dealers and Honda franchises. The Honda National Dealer Advisory Board has notified American Honda Motor Company of its serious concerns regarding the joint venture.

Dave Gardner, executive vice president of business and sales at American Honda, said last year that less inventory is more efficient, and that with digital retail playing a bigger role in car shopping and buying, Honda’s dealer physical said that the size of the business may shrink. What is the status of that discussion?

Honda recently reworked its facility guidelines with lower requirements than previous iterations. Honda is trying to realize that the world is changing, facilities are getting smaller, and the need for parts departments and storage space, perhaps even the size of their service facility, could get smaller. We can’t do much about the facility, but we have some idea of ​​how much bigger footprint it will eventually need as it is rebuilt. And Honda, to their credit, has been flexible with their dealers on facility requirements, arguably more reasonable than others. [manufacturers].

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