Jan. 18, 2010 – Reviewing Honda’s 2010 plans
January 18, 2010
Filed under Features
By Jeff Hemmel
While some consumers are speculating the lack of 2010 models from Honda is a signal the brand is losing interest in the PWC market, recent comments from Honda officials, as well as some of its dealers, would indicate otherwise.
Namely, that Honda is simply getting a handle on its inventory in the midst of a trying economic climate, rather than simply add to glut of models on the market.
Honda first announced that production of AquaTrax vehicles at its Timmonsville, S.C. manufacturing facility had been suspended in January 2009, followed by the suspension of ATVs in March. By May, production of ATVs had resumed, but by September the company noted that Honda of South Carolina Mfg., would focus “exclusively” on producing ATVs due to improving demand in that market and the reduced inventory of most of the brand’s ATV models. At that time, Honda also indicated that the Timmonsville plant would not resume production of PWC, but would resume production at another Honda plant once the market demanded it.
Months later, that’s still the company line. Honda is offering little additional insight into the situation, with company reps simply stating what has already been announced — that production is on hold until the market warrants the building of new models.
“Our current inventories of Honda PWC are adequate to meet the current market demand,” Honda’s Jon Seidel replied when asked to explain the company’s current position. “Therefore, a 2010 model will not be necessary. Production of PWC will resume at another Honda plant in the future once market conditions improve.”
According to Seidel, there are currently
296 Honda AquaTrax dealers affected by the situation. That’s still near the company’s all-time high of 300; in fact the numbers have remained between 250 and 300 dealers for the past five years.
“Dealers understand our business position,” said Seidel, “and appreciate our decisive action.”
While many consumers have speculated that’s just shop talk, those closer to the situation, including the brand’s all-important dealers that Powersports Business spoke with, not only applaud the decision, but note it is not unique to PWC. Honda also chose not to bring out 2010 product in their small trail-bike line, including the Honda 50, 70, 80 and 100, along with several ATV and street-bike models.
“They’re just trying to get their inventory back in line and get production in line with what’s selling,” said Joe Gentle, sales manager at Al Lamb’s Dallas Honda. “I think it’s a great thing. In the past, especially if there weren’t any changes in a model — just bold new graphics — there are usually no changes and there’s usually no change in price even. So it’s another new-year model for the exact same price.
“Dealers need to choose to clean out their inventories and Honda needs to choose to clean out their warehouse to get more in tune with what’s selling.”
According to Gentle, it’s a situation some Honda dealers have been calling for during the last five-to-eight years. “Honda’s taking these last two years as a big step toward productivity and warehouse management,” continued Gentle. “The dealers have really been asking for this. I think the company listened, but it was probably the marketplace and the economy that provided the final leverage.”
Riva Motorsports co-owner Dave Bamdas echoes much of Gentle’s comments. Riva has had a rocky road with the brand, becoming one of the first enthusiastic AquaTrax dealers initially, only to lose the brand after Honda demanded dealers build exclusive Honda PowerHouse facilities, a move that would have proved almost financially impossible in then-pricey South Florida. “They pulled Honda PWC out of our dealership for two years because we didn’t build an exclusive Honda PowerHouse facility,” said Bamdas. “Then they reinstated our PWC dealership due to revisions in the Honda Powerhouse Program that now allow non-exclusive Honda dealers to sell PWC.”
Bamdas agrees with the Honda position of not producing new models at the moment. “I think this was a smart move for Honda considering the large amount of noncurrent PWC inventory and low demand for the product. In this tough economic climate, it was probably the best decision for both Honda and their dealers.”