Honda tells U.S. dealers to honor discounts on out-of-stock cars
Elena Vnorovscaia/ Chișinău / Moldova.ORG/ -- Honda Motor Co., still struggles to recover from the March earthquake in Japan. That is why it told U.S. auto dealers to honor discount offers, even if customers have to wait for delivery because a model is out of stock.
Honda and its Japanese rival, Toyota Motor Corp., have seen production drop significantly since the earthquake and tsunami, leaving some dealers with insufficient inventory. That is surely worries the corporation owners.
"We know we're going to have low inventories on some models - Civic is the perfect example," says Honda spokesman Gary Robinson. "What we don't want to do is just send those people on their way without taking care of them."
According to The Wall Street Journal, Honda told U.S. dealers today about the new effort, called the Honda Promise, as it attempts to boost sales and stem market share losses.
Honda also unveiled other incentives on Wednesday. Honda also will agree to extend expiring leases by 12 months for customers using Honda Financial Services, the company said in a memo to dealers. The automaker's U.S. sales dropped 22.5 percent in May, reflecting lower discounts and tight supplies.
This offer expires August 1 and is not available on cars built in Japan, such as the Honda Fit and its hybrid models. Honda production outside Japan has also been curtailed by a lack of parts.
Its Acura dealerships are making a similar offer. Discounts are offered to encourage sales of existing inventory and dealers typically do not offer promotional prices on cars they do not have available to sell.
The Japanese automaker warned investors on Tuesday that operating profit could fall as much as 65 percent this year because it has had to delay the launch in the United States of major models, including its new Fit Shuttle and a new version of its top-selling Civic.
Production fell by half in April, although both companies expect to recover more quickly than some investors initially feared.
Honda expects output to return to near normal levels by August, though production of models such as the Civic will still be hindered. The interesting fact is that analysts have forecast that U.S. automakers could gain market share this year as a result of the troubles of their Japanese rivals.