Honda: Dealer Inventory of 2012 Honda Civic Is Virtually Zero

Just the Facts:
-Sales of the 2012 Honda Civic appear to be stalled, with the Japanese automaker reporting that October sales of the Civic were down 2 percent.
-Honda says it's because dealer inventory is "virtually zero" due to natural disasters in Asia, including the Japan earthquake and tsunami in March and recent flooding in Thailand.
-"Dealers can't sell cars that they don't have on their lots," a Honda spokeswoman told Inside Line on Thursday.

TORRANCE, California — Sales of the 2012 Honda Civic appear to be stalled, with the Japanese automaker reporting this week that October sales of the Civic were down 2 percent.

Honda tells Inside Line that it's not because the redesigned small car, which debuted with much hoopla at the 2011 New York Auto Show, is not resonating with buyers or needs better direction with advertising or social media efforts. The Japanese automaker says it's because dealer inventory is "virtually zero" due to natural disasters in Asia, including the Japan earthquake and tsunami in March and recent flooding in Thailand.

"Dealers can't sell cars that they don't have on their lots," said Gina Jorge, assistant manager for American Honda Motor Co. public relations in response to an e-mailed query from Inside Line on Thursday. "In fact, most dealers are selling Civics nearly as fast as they receive them."

On November 1 Honda said Civic posted October sales of 16,173, down 1.9 percent from the previous October. It sold 480 units of the 2012 Honda Civic Hybrid, a decline of 24.7 percent from the previous October.

Honda reported year-to-date Civic sales of 183,557 versus 215,393 in the same period in 2010. But it is unclear how many of the 183,557 were 2012 Civics. The various models of the 2012 Civic have been gradually rolled out this year. The sedan, coupe and hybrid versions debuted on April 20; the Civic HF debuted on May 10; the Civic Si coupe and sedan debuted on May 24 and the Civic Natural Gas model debuted on October 18.

Honda said it does not break out sales by model year and does not break out sales by various models with the exception of the Civic Hybrid. It has projected sales of approximately 2,000 Civic Natural Gas models per year in the near term, double the amount sold in recent years.

"Civic sales are down for one simple reason," wrote Chuck Schifsky, an American Honda Motor Co. spokesman in response to the e-mailed query from Inside Line. "Low dealer inventory as a result of a shortage of small parts caused by the Great East Japan Earthquake earlier this year which nearly halted production of the 2012 Civic."

Schifsky noted that flooding in Thailand "will cause another disruption in production."

"It's still too early to say how deeply this will impact production of the '12 Civic," he added. "But because dealer inventory of Civics is virtually zero and dealers are selling the few Civics they are getting almost as soon as the cars arrive, any disruption in Civic production will not help the situation."

He added: "We need to build more Civics and get them to our dealers. This is a supply problem, not a demand problem. There just aren't any Civics on dealer lots."

When the Japan earthquake hit, production of the Civic was just ramping up. Approximately 90 percent of the vehicles Honda sells in North America are built in North America, according to the automaker. The bulk of Civic models, including the sedan, are built in Greensburg, Indiana. Honda began a second production shift last week there, which boosts production to its full 200,000-unit annual capacity.

"While the majority of the parts are sourced in North America, there are a small number of parts that are sourced from Japan," Schifsky wrote. "This is what caused the vehicle shortage."

Honda announced earlier this week that flooding in Thailand will cause another disruption in production, likely delaying the debut of the 2012 Honda CR-V.

"It's still too early to say how deeply this will impact production of the '12 Civic," Schifsky said.
Inside Line says: Earthquakes and floods mean the 2012 Honda Civic is off to a rocky start in the marketplace.

Source;
http://www.insideline.com/honda/civic/2012/honda-dealer-inventory-of-2012-honda-civic-is-virtually-zero.html