Honda Motor will boost incentives in the deeply troubled US market but will not match rivals with zero percent finance, its chief financial officer said in Japan on Tuesday.
As just-auto has reported, US industry-wide light vehicle sales plunged 34.5% (adjusted for selling days) to 834,752 units last month. Honda sales were off 28% to 85,864.
Toyota and Nissan are either extending or planning zero-percent finance incentives while GM has brought forward its ‘Red Tag’ year-end promotions that reduce prices and offer cash back.
But Honda is not following entirely suit.
“We’re not planning any zero-percent financing,” Honda’s Yoichi HOJO told Reuters though he said the US unit would offer lower financing rates of 1.9% from around 2.9% previously. It began offering the reduced rate on the popular Civic late last month, he said.
“Our inventory level for the Civic is still on the low side, but competition is heating up dramatically,” he said, adding that Honda would also take other steps to support falling Accord sales.
Honda expects retail sales in the United States to be 65,000 vehicles lower than original projections, at 1.51m Hojo told the news agency.
“It’ll be difficult to expect a recovery in North America and Europe in the next six months,” he said. “And it’s even more difficult to predict what path the emerging markets will take.”
A week ago, the automaker revised its fiscal full year forecast net sales and other operating revenue down 3.4% compared with FY08 to JPY11,600bn, operating income down 42.3% to JPY550bn, income before income taxes down 35.3% to JPY580bn, affiliate income equity up 5.1% to JPY125.0bn and net income off 19.2% to JPY485bn.