The Japanese-based automaker reported an 8.8 percent boost in U.S. sales in January compared to the same month last year. It is a strong start to 2012 for a company that last year suffered sizable financial losses and had to draw down workloads at all its plants due to supply chain interruptions from natural disasters.
Mark Morrison, spokesman for the Honda Manufacturing of Alabama plant in Lincoln, said 2011 was a tough year for the automotive industry, but particularly for Honda.
“Through it all, our associates have remained upbeat and flexible,” Morrison said of employees at the plant. “We knew our production situation, although terrible, was only temporary. Today, our industry is rebounding and our team of associates in Lincoln is glad that it is. The demand for the products we are producing is encouraging.”
Morrison said it's unlikely new employees would be hired because of the increased demand. However, he noted some employees are now working extra hours.
“In Lincoln, we have scheduled daily overtime and some production Saturdays in an effort to meet demand for our light trucks — Odyssey, Pilot and Ridgeline,” Morrison said.
The March tsunami and earthquake in Japan followed by July flooding in Thailand shut down many of Honda’s auto suppliers, leading to a shortage of new vehicles through most of 2011. While the company avoided layoffs, employees at its manufacturing plants worked fewer hours, took vacation time or took paid training classes to pass the time. Honda’s automotive plants, including the one in Lincoln, have since returned to full production.
The $1.5 billion Honda plant in Lincoln employs about 4,000 people and is the sole North American producer of the Odyssey minivan, Ridgeline pickup truck and Pilot SUV.
New vehicle models boosted January sales, said Bill Visnic, auto analyst and senior editor for Edmonds.com, as did motorists' needs for new vehicles.
“I think we are seeing some release of pent-up demand across the board for the industry,” Visnic said. “But Honda particularly.”
Visnic said Honda’s new CR-V SUV and Accord sedan have been popular and helped the company in January.
But though the Lincoln plant will not be hiring additional employees to meet growing demand this year, it will be adding about 140 jobs through 2013 due to planned expansions. The plant is currently moving forward with about $275 million in new investment projects to increase its manufacturing capacities.
Kevin Riggan, general sales manager for Sunny King Honda in Anniston, said his dealership might need to add a few employees soon if sales continue to grow like they did in January.
“Whenever numbers go up and sales go up, it’s always a distinct possibility,” Riggan said.
Riggan said sales at his dealership increased 30 percent in January compared to the same month last year.
“It was outstanding,” he said.
Riggan said sales of all Honda models improved and attributed the growth to increased inventory.
“And the pent-up demand obviously helped,” Riggan said, adding that January sales have made him optimistic about the rest of the year.
“January was a really difficult month last year and winter is usually difficult for the industry,” he said. “But it seems like there is more demand now. I have a really good feel for this year.”
Still, Visnic foresees a few challenges for Honda through the rest of the year. He said Honda might have lost some longtime customers last year when they were forced to look at other companies because of the inventory shortage.
“What the real problem is they had trained some buyers to look elsewhere,” Visnic said. “That’s what they’ll need to overcome.”
Staff writer Patrick McCreless: 256-235-3561. On Twitter @PMcCreless_Star