Posted by Dale Buss on June 16, 2011 01:30 PM
Hyundai offers its Assurance; now Honda has its Promise.
In a bid to hang on to small-car customers it might otherwise be losing because it is running short of key models including Civic, Honda is launching a new policy that allows US dealers to honor current incentives ... even if purchasers must wait weeks until the exact units they want become available.
Yes, not all brand fans are like "Million-Mile Joe," a Honda loyalist in Norway, Maine, who's about to hit the million mile mark in his 1990 Accord.
Honda has been slammed hard by shortages of key components and, thus, cars since Japan's earthquake and tsunami on March 11. Its US sales fell by 23% in May largely because consumers found a paucity of available cars in showrooms, and the company reported this week that its fiscal-2012 profits will drop by about 63% from last year’s levels.
So the Honda Promise is part of a new effort to claw back would-be defectors in the US market. Running through August 1, the program also involves extending expiring leases by 12 months for customers who use Honda loans, the company said in a memo to dealers, according to The Wall Street Journal. The basic new program also applies to Honda’s Acura luxury brand.
And interestingly, Honda Promise doesn’t apply to vehicles built in Japan, such as the Fit. Output there is coming back relatively quickly; Honda’s bigger problem is with its vehicles built outside Japan, such as in the United States, where its crucial new Civic model is assembled. It took longer for supply-chain disruptions to ripple out to its overseas factories, and it’ll take longer for Honda to correct them.
But the introduction of Honda Promise may herald the beginning of brighter days for Honda. The company plans to boost second-half output by more than 20% over the first half of 2011. And for American customers who don’t mind waiting to get just the Honda they want, Promise could be just the ticket.