Honda's (HMC) Vehicle Sales Tank Despite Strong Passenger Car Demand

Honda’s US vehicle sales dropped 9.2% in July, a far cry from the devastating plunges suffered by Ford (F) and General Motors (GM), but still worse than expected. Honda is still benefitting from selling more fuel-efficient cars than its American rivals, but now it has another problem: It can’t make enough of them to meet demand (Reuters):

Honda Motor Co (HMC) said on Monday its output of passenger cars would fall short of demand at least through the rest of the business year to next March as fuel prices force customers to look for smaller cars.

“We don’t have enough Accords, Civics and Fits in the United States,” [Chief Financial Officer Yoichi Hojo] told Reuters.

While Honda looks to increase capacity and capitalise on North America’s new-found appetite for fuel efficient cars, there is no quick fix. The shortage of supply and inventory will last through the end of the business year.

As $125 oil wreaks havoc on automakers, even good news (strong demand for cars), never trumps the bad.

See Also:
General Motors (GM) Car Sales Plunge


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