How Honda Is Overcoming Strong Trends In The U.S. Auto Market
Honda Motor (NYSE: HMC) had twenty vehicles present in the U.S. vehicle market as of the end of calendar year 2015. Of these, nine were in the light trucks segment, which includes SUVs, crossovers and trucks, while the rest were in the passenger car market. If one looks at Honda’s 2016 performance through August in the U.S. auto market, one sees something quite unusual. New vehicle sales in the U.S. vehicle market have been roughly flat so far this year, but passenger car sales have declined by over 8% year over year, while crossovers have performed extremely well.
However, this trend isn’t reflected in Honda’s performance. To be sure, the growing importance of the Honda CR-V compact SUV to the Japanese auto maker cannot be understated. The vehicle has outstripped the sedan Accord to become Honda’s second most important vehicle in the U.S. In August, it was the company’s highest selling model. However, overall, passenger car sales have out performed truck sales for the company. This is largely the result of a 15.4% increase in new unit sales of Honda’s highest selling vehicle, the sedan Civic. If Honda can sustain this performance it might be immune to many of the problems plaguing its fellow Japanese auto maker Toyota in the U.S. market.
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Notes:
1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Honda Motor
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