The American Honda Motor Company reported Monday that its November sales increased 38.9 percent compared to the same month last year – an all-time record of November-to-November growth for the Japanese-based automaker.
The manufacturer’s auto plant in Lincoln, Honda Manufacturing of Alabama, employs 4,000 and produces vehicles that helped make that record a reality: the Odyssey minivan, the Ridgeline pickup truck and the Pilot SUV.
According to Honda, Ridgeline sales increased 38 percent in November while Odyssey sales increased 1.9 percent. The Pilot struggled in November, however, with a 10.7 percent decrease in sales.
With increased sales come more business, not just for the plant, but for many other businesses in the area, experts say.
“Absolutely, when more people are working at a large plant like Honda, it brings an infusion of spending in the local economy,” said Robert Robicheaux, chairman of the department of marketing, industrial distribution and economics at the University of Alabama at Birmingham.
Robicheaux said 70 percent of spending in a community comes from consumer purchases. And more jobs, particularly well-paying manufacturing jobs, lead to increased spending on homes, vehicles, restaurant visits and retail shopping. And that leads to more spending by area businesses in those fields, Robicheaux said.
“Every $1 caused by employment to Honda or any manufacturing plant, it has a multiplier effect of $1.25 to $1.50 in the local economy,” Robicheaux said.
Ted Pratt, spokesman for Honda Manufacturing of Alabama, said Honda is keeping up with demand – with the Lincoln facility producing about 1,400 vehicles and engines a day.
“This production rate is structured to maintain that ideal inventory image for each of the three vehicles that HMA produces,” Pratt said. “This production plan also takes into account monthly and seasonal sales variations throughout the year.”
Pratt noted that due to the competitive nature of the auto industry, Honda does not release individual vehicle production plans.
Honda also reported that the Acura MDX, a luxury sports utility vehicle, was the best-selling vehicle among the three vehicles in its Acura line. The Lincoln plant is undergoing expansion efforts so it can begin manufacturing the MDX next year. Honda has announced the creation of more than 400 jobs due to the expansion.
“HMA continues to hire associates to fill both production positions and professional openings,” Pratt said.
The increased sales and extra jobs mean higher consumer spending, but it also means more work for area businesses, including auto suppliers. According to statistics from the Alabama Department of Commerce, the Honda plant has 131 auto suppliers. Of those, 37 are located in Calhoun and its neighboring counties of Etowah, Talladega and St. Clair and account for up to 3,450 jobs.
Greg Brown, chairman and CEO of B.R. Williams Trucking in Oxford, said his business delivers parts to and from Honda and has benefited from the auto manufacturer’s improved sales. Brown said his company hauls parts for about 30 suppliers to the Honda plant.
“They have increased their production sufficiently … and we’re having to do some weekend overtime,” Brown said. “We are having to work on some Saturdays.”
Brown said Honda accounts for about 35 percent of his company’s trucking business.
“Their sales indicate growth and we are pleased to be partnered with them,” Brown said.
Dennis Virag, auto industry analyst with the Automotive Consulting Group, said he does not expect Honda’s success to slow anytime soon.
“I think they are going to continue to be on the rise,” Virag said. “Honda has a very competitive product lineup … they are producing the types of cars people want and that is reflected in the sales numbers.”
Virag noted, however, that some of Honda’s growth this year is due to rebound from the tsunami and earthquake that hit Japan last year. The disaster limited parts shipments to America for several months, limited the number of vehicles plants could produce. Sales slumped due to lack of inventory.
“I think some of the increase is part of the rebound, but some is just market growth for Honda,” Virag said.
Staff Writer Patrick McCreless: 256-235-3561. On Twitter @PMcCreless_Star.