Strange but True: American Honda Is Surging Because of Cars, Not SUVs

Timothy Cain
by Timothy Cain
strange but true american honda is surging because of cars not suvs

Though growth in the American new vehicle market slowed in the first-third of 2016, U.S. sales of SUVs and crossovers jumped 9 percent, a gain of 173,000 sales, year-over-year.

Matching the rate of expansion seen in calendar year 2015, the highest-volume year on record for the U.S. auto industry, was never going to be easy. It’s made all the more difficult by decreasing interest in the largest corner of the market: cars. Sales of passenger cars are down 5 percent so far this year, exacerbating a trend that was already set in stone a year ago.

Yet sales volume in Honda dealers is rising rapidly in the first four months of 2015. Honda just reported record April auto sales, not because of popular utilities such as the CR-V and Pilot, but because of cars.

Yes, Honda’s two key cars are selling far more often this year than last.

Truthfully, sales of Honda utility vehicles have increased, as well, but not because of the CR-V and Pilot, sales of which are down 2 percent and 17 percent, respectively, this year. Compared with the first four months of 2015, Honda has added 22,484 sales of the Fit-based HR-V. (Fit sales are down 32 percent in early 2016.) The HR-V wasn’t on sale at this point in 2015.

But the CR-V, faced with matching its own record-setting pace in 2015, its fourth consecutive year as America’s top-selling utility vehicle, is down marginally. CR-V volume fell 2 percent in the first four months of 2016, a 2,478-unit drop, as the Toyota RAV4 took over as America’s best-selling SUV/crossover. Friend of TTAC John Rosevear wrote in late March that Honda’s planned addition of CR-V production capacity in Greensburg, Indiana, means the automaker “will have the opportunity to show that CR-V sales in the U.S. have been limited by supply, not by demand.”

Through the end of April, Honda’s North American plants assembled 152,769 CR-Vs, according to Automotive News: 73,676 in Alliston, Ontario; 58,199 in East Liberty, Ohio; 20,894 in their Jalisco, Mexico plant. Heading into April, the CR-V had a 78-day supply of inventory, Automotive News estimates, in excess of the industry average. But year-over-year, CR-V sales dipped 2 percent in April, a modest loss worthy of mention purely because of the sector’s surge.

For the Pilot, however, supply continues to be an issue, as the biggest Honda’s plant in Lincoln, Alabama, is also responsible for the assembly of the Odyssey minivan, Acura MDX, and new Honda Ridgeline. Capacity for Pilot production won’t truly be improved until 2017, when some MDX production moves to Ohio. In the meantime, Honda had only a scant 25 days of Pilot supply at the beginning of April, roughly 10,000 units, for a vehicle that averages 11,000 monthly sales.

Particularly because the clear-out of second-gen Pilots at this time last year resulted in such high volume, and in part because of limited supply, Pilot volume tumbled by 8,000 units in the first four months of 2016.

For automakers with highly respected, long-established, popular utility vehicle nameplates, conditions are ripe for success in America. At Honda, however, dealers are relying on two original Honda car nameplates, the all-new Civic and refreshed Accord, for its 2016 boom.

At this stage of 2015, the best-selling Honda in America was the CR-V, and fewer than half the Hondas sold in America were Civics and Accords.

Fast forward one year and more than half the Hondas sold in America are Civics and Accords, and both cars are outselling the CR-V.

In this crossover-crazy market, newness isn’t a surefire way of finding success with a passenger car. As evidence, just consider the new-for-2015 Honda Fit, sales of which fell 11 percent in calendar year 2015.

But the Civic has received an enormous amount of positive press, with high praise for its roomy interior, livelier chassis, and powerful 1.5-liter turbocharged engine. After the ninth-generation Civic seemed like a step backward for Honda, the tenth-gen car is a top candidate for compact buyers, a car which also provides reason for loyalists to restore their faith in Honda. (But it’s not the prettiest-ever Civic rear end, is it?)

The Honda Civic was America’s best-selling car in April 2016, 1,300 sales ahead of the second-ranked Toyota Camry.

The Camry’s historic rival, of course, is the Honda Accord, sales of which jumped 13 percent in 2016’s first four months and 16 percent in the Honda brand’s record-setting April. U.S. sales of midsize cars are down 3 percent this year – 4 percent in April – and the class-leading Camry is falling, too. But if American Honda continues to grow Accord sales at the current pace, more than 400,000 Accords could be sold in the United States this year, a mark not achieved by the Accord since 2001, when the Accord was America’s best-selling car.

Even with the near-disappearance of the Insight and Crosstour, the CR-Z’s continuing decline, and the Fit’s sure and steady downturn, Honda’s car sales are up 13 percent so far in 2016.

At this point last year, who would have thought that American Honda would add more than 40,000 Civic and Accord sales to their 2016 ledger while losing more than 10,000 Pilot and CR-V sales?

[Image Source: American Honda]

Timothy Cain is the founder of GoodCarBadCar.net, which obsesses over the free and frequent publication of U.S. and Canadian auto sales figures. Follow on Twitter @goodcarbadcar and on Facebook.

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  • Dougjp Dougjp on May 19, 2016

    If the Civic would get a redesigned rear end, it would sell even more. Strange the article missed out stating what percentage increase the Civic had seen to get it to being the top selling car. Honda SUV/CUV/Boxes or whatever you want to call the hubris are lukewarm in selling simply because everyone else is flooding that segment of the market. Honda puts an engine that gives actual strong acceleration into a compact car and people buy a lot of them. Who knew? Not GM who are at the same time discontinuing a compact car entirely!

  • CincyDavid CincyDavid on May 19, 2016

    We have been leasing Hondas (4 in the last 3 years) but I have noticed that the advertising we have gotten in the mail recently is pushing buying instaed of super-cheap lease deals...$299/mo for 72 months on a '16 Accord LX with no money down is the one I remember from yesterday. I keep thinking that the manufacturers HAVE to push buying over leasing at some point, and I wonder if the changing mailers is indicative of that change starting to happen.

  • Probert There's something wrong with that chart. The 9 month numbers for Tesla, in the chart, are closer to Tesla's Q3 numbers. They delivered 343,830 cars in q3 and YoY it is a 40% increase. They sold 363,830 but deliveries were slowed at the end of the quarter - no cars in inventory. For the past 9 months the total sold is 929,910 . So very good performance considering a major shutdown for about a month in China (Covid, factory revamp). Not sure if the chart is also inaccurate for other makers.
  • ToolGuy "...overall length grew only fractionally, from 187.6” in 1994 to 198.7” in 1995."Something very wrong with that sentence. I believe you just overstated the length by 11 inches.
  • ToolGuy There is no level of markup on the Jeep Wrangler which would not be justified or would make it any less desirable [perfectly inelastic demand, i.e., 'I want one']. Source: My 21-year-old daughter.
  • ToolGuy Strong performance from Fiat.
  • Inside Looking Out GM is like America, it does the right thing only after trying everything else.  As General Motors goes, so goes America.
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