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American Honda Motor suffered severe inventory
droughts during the pandemic and semiconductor crisis, but it has
emerged in 2023 with redesigned core products and an easing of
production challenges – giving the automaker a boost heading into
2024.
While supply chain disruptions hit every OEM,
they rocked parent company Honda Motor particularly hard. The
automaker built just 3.9 million vehicles worldwide last year, down
from 4.1 million in 2021, 4.4 million in 2020, and 5.2 million in
2019, according to the automaker. Repeated extensive production
shutdowns due to ongoing supply chain issues hampered any chance of
catching the consumer demand surge as the world emerged from the
pandemic.
These circumstances combined to drive retail
registration market share of US sales arm American Honda to a low
of 7.1 percent in April 2022.
And while American Honda market share has not
yet returned to pre-pandemic peaks – at 12.2% just as COVID hit –
it hit a recent high of 11.0% in May and has held steady at around
10.3% since then, before jumping to 10.8% in September.
Perhaps most remarkably, the Honda brand has
seen US volume and share growth while inventories have stayed
painfully tight – below 30 days supply. (Acura has seen a jump from
20 days supply in 2022 to 50 days supply in September 2023, though
still less than pre-pandemic numbers).
The automaker can thank several factors for its
2023 turnaround, but a more compelling product line should be at
the top of the list. The Honda brand has successfully orchestrated
a product revival of sorts. The CR-V, Civic, Accord, and HR-V have
all received significant updates in the last two years, and Acura
revived the Integra nameplate to replace the ILX with much social
media fanfare. As a result, while the production lines are cranking
back up, sales demand is still greater than the number of cars
arriving on dealership lots.
The 2024 model year will bring more new models
to Honda and Acura, including the pair’s first mass-market EVs in
the United States. The Honda Prologue and Acura ZDX are scheduled
to arrive in early 2024, and, thanks to the platform partnership
with General Motors to use its Ultium technology, the SUVs will
benefit from long battery range and fast charging capability. So
while Honda and Acura may be arriving late to the electric SUV
battle, they will have the products to hopefully reverse the brand’s
defections to the Tesla Model 3 and Model Y.
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This article was published by S&P Global Mobility and not by S&P Global Ratings, which is a separately managed division of S&P Global.
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