Honda and Toyota: Getting Back on Track

Honda and Toyota: Getting Back on Track

This year hasn’t been the kindest to Japanese automakers Honda and Toyota. The devastation wrought by March’s earthquake and Tsunami in Japan, resulted in severe disruptions to their supply chains, causing dealer inventories to run low and other automakers to gain ground in sales.

However, after a dismal July, there are signs that both Honda and Toyota are gaining momentum; supply from Japan has improved, while factories in North America are running in overdrive in an effort to boost vehicle inventory to more ‘normal’ levels.

Even though rivals, including Detroit’s big three, have gained ground this year as a result of problems facing the Japanese duo, most seem to view  Honda and Toyota’s improving fortunes quite favorably.

Don Johnson, General Motors’ US sales head, believes that more Hondas and Toyotas on dealer lots will help stimulate overall growth in new car sales, bringing back buyers who’ve been sitting on the fence. “A lot of brand-loyal customers have chosen to sit on the sidelines until selection and price improve,” he says. “They will be coming back into the market.”

That said, it is likely to be some time before inventory levels reach pre-March totals. Randy Pflughaupt, group vice president of sales administration for Toyota, believes it will be 2012 before the automaker achieves year-over-year sales increases; Honda meanwhile, is currently running at around 95 percent of normal production in Japan, with full inventory achieved on all US product lines bar the Civic which traditionally is one of it’s most popular models.

According to a number industry analysts, it’s inventory that defines the ‘winners’ and ‘losers’ in the marketplace and right now, as it stands, Domestic brands are leading the way, Chrysler boasting a 72 day supply on its vehicles, allowing it to post a 20 percent gain in sales during July, as Honda and Toyota combined, slipped 6.9 percent. Ford, with a 54 day supply has seen sales jump by 13 percent for the bread and butter brand and 40 percent for Lincoln in the same period. GM, with a 73 day supply has reported gains of some 8 percent.

“Whoever has the cars, outsells everybody,” declared Ralph Martinez, a Chrysler dealer principal from Wilsonville, Oregon. “People are out there buying,” he said, but “they’re going to places that have a good selection.”

[Source: Automotive News]

  • Mike from Kanada