According to Honda’s figures, the Japanese-based automaker’s North American division sold 90,773 vehicles in May, a decrease of 16.1 percent compared to the same month in 2010.
Honda’s manufacturing has slowed across the United States, including at Honda Manufacturing of Alabama in Lincoln, for a couple months now due to a lack of parts from Japan. A massive tsunami and earthquake hit Japan in March, knocking out much of the production there.
"May sales are on par with what we expected due to the lingering effects of parts and production shortages resulting from the devastating March 11 earthquake in Japan," said John Mendel, executive vice president of sales for American Honda, in a press release. "We are confident that sales will rebound as our North American plants reach 100-percent production capacity for most models in August."
The Lincoln plant is operating at 50 percent capacity but recently announced it would be back at 100 percent by August. No layoffs of the plant’s 4,000 employees are expected, but workers have had fewer hours to work.
The Lincoln facility is the sole North American producer of the Odyssey minivan, which had a 5.5 percent increase in May sales – one of the few Honda vehicles to do so that month.
Dennis Virag, president of the Automotive Consulting Group, agreed that Honda’s dip in sales were due mainly to the disaster at Japan.
“Yeah, that’s definitely the reason for the shortfall in product and the shortfall in sales,” he said.
Virag said, however, that the temporary shortfall would not mean many Honda customers would start looking at other auto makers for a new vehicle.
“Generally, they are waiting for the new vehicles to show up,” he said. “Some will shop around, but the vast majority of Honda buyers want a Honda and will wait for new models. I don’t think it will be a problem for Honda since they have a loyal customer base.”
Kevin Riggan, general sales manager for the Sunny King Honda in Anniston, said the production lull has been a problem for his dealership.
“Inventory is definitely tough right now,” he said. “But in a couple of months, we should be back up.”
Riggan said, however, that the Honda vehicles Sunny King has had in stock have sold well.
“We’ve done OK … we had a really good month last month,” he said.
From his experience, Honda customers are not looking elsewhere, but are instead waiting on the vehicles they want to come in stock.
“We’ve been taking deposits and telling (customers) when we’ve got vehicles on order,” Riggan said. “Honda has a very loyal customer base.”
Bill Visnic, auto analyst and senior editor for Edmonds.com, said he also thought Honda’s poor sales numbers were due to the Japan disaster.
“By and large, I’d have to chalk that up to the vastly reduced inventory,” he said.
Visnic said he did not expect many Honda customers to switch to other car companies either, meaning the automaker will possibly make up many of its lost sales later this year.
“It really comes down to brand loyalty,” he said. “Honda typically has had high brand retention customers, so we think they will be willing to wait.”
Visnic noted that few Honda customers likely switched in May since domestic automakers also had weak sales numbers that month. For instance, General Motors’ sales in May were down 1 percent from the same month last year while Ford’s sales were down about 2 percent.
He said those poor sales numbers could also be partially attributed to the tsunami disaster since many American companies purchase parts from Japan as well.
“Also, there is some trepidation from consumers as prices have gone up,” Visnic said. “High gas prices, low inventory, the overall state of the economy; all these things right now are very high in the consumer mindset.”
Contact staff writer Patrick McCreless at 256-235-3561.
