Honda could normalize low inventory levels

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Honda may seek to normalize low inventory levels, according to a recent report. In response to an ongoing shortage of inventory and the reality of more new-car buyers placing orders, the Japanese automaker is looking for ways to reduce overhead costs by stocking fewer cars in its nationwide network of Honda dealers.

In a recent interview with an industry publication Automotive News, Dave Gardner, Honda’s Executive Vice President of National Operations, said: “If you’re able to take a significant chunk of that overhead out of the equation, I think you’ll make it a much more efficient and profitable business. for all concerned.”

Honda’s national inventory consists of 20,000 cars at the start of 2022, up from 300,000 normal vehicles in the field, plus another 100,000 in the automaker’s production pipeline. Despite a shortage of inventory, Gardner said Honda plans to settle for as few as 100,000 new cars in its pipeline.

Lower inventory may become the norm with some brands. As CarsDirect reported today, Ford will adopt a regional strategy called inventory cropping intended to stockpile top-selling vehicles. Although consumers can still order any vehicle, the complexity of in-stock configurations will decrease by up to 80%.

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Source: Automotive News

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