Honda thumbs nose at fleet sales, claims it leads in key vehicle segments

Tue, 30 Jul 2013

Fleet sales are a way of life in the automotive industry. There are many non-retail customers that need vehicles, but going too far can reduce brand image and vehicle resale value. While some of its competitors have fleet sale that account for up to 20 or 30 of overall sales, Honda is bragging that it has the lowest fleet sales of all mainstream automakers for the first five months of 2013.

After calculating new-car registration data from R.L. Polk, Honda says that just two percent of its sales through went to fleet customers compared to an industry average of 19 percent. Even though this means Honda leaves plenty of sales on the table each month, it also claims to have the highest resale value and lowest cost of ownership among its competitors. In terms of retail sales, Honda says that the Civic, Accord, CR-V and Odyssey all lead their respective segments, and it breaks down/brags about its retail sales success in the press release, which is posted below.

Honda Leads All Automakers in Retail Sales in Key Volume Segments

Accord, Civic, CR-V and Odyssey tops in respective segments year-to-date

07/29/2013 - TORRANCE, Calif.

-Accord, Civic, CR-V and Odyssey rank #1 in retail sales in their respective segments, according to latest Polk data
-Honda brand sales of 668,597 up 6.5 percent year-to-date through June
-More than 98 percent of brand sales to retail customers, protecting resale values; many competitor brands exceed 20 percent in fleet sales

Honda topped all mainstream automakers in percentage of sales to retail buyers during the first five months of 2013, with more than 98 percent1 of the brand's auto sales in the U.S. sold to individual (non-fleet) consumers, based on new-vehicle registration data from R.L. Polk & Co. With a strong focus on providing long-term value and low cost of ownership to its customers, the Honda brand has increased sales by 6.5 percent in 2013 with 668,597 Honda cars and light trucks finding new homes through the end of June.

Honda's four best-selling models, Accord, Civic, CR-V and Odyssey, lead their respective segments2 in sales to retail consumers. Together, these segments represent more than 50 percent of all light-duty vehicle sales in the United States.

"We're earning our sales growth on the strength of our products and the value they deliver to individual car buyers," said John Mendel, executive vice president of sales for American Honda Motor Co., Inc. "Our strategy is unique among volume automakers, as we are focused on selling vehicles to individual car buyers and not corporate sales to fleets, which is why Honda vehicles have among the lowest cost of ownership and highest resale values in the industry."

In the highly competitive mid-size segment, where Accord leads retail sales, many high-volume entrants have sold in excess of 30 percent1 of their vehicles to fleet customers thus far in 2013 while over 98 percent1 of Accords were sold to individuals (non-fleet). The 2013 Accord is the most-awarded3 mid-size car when it comes to value. "Honda continues to deliver on the promise that made them the Residual Value Award recipient for 2013," said Eric Lyman, vice president of Editorial for ALG.

"Honda keeps incentives and fleet penetration low - two actions that heavily impact future values. With high volume models like Accord and CR-V at the top of their respective segments, Hondas hold their value better than any other brand."

According to Honda analysis of Polk new-vehicle registration data, more than 19 percent1 of light-duty vehicle industry sales so far this year have been to non-retail customers such as rental-car companies, corporate and government fleet operations, most at steeply discounted prices compared to the average retail transaction price. Discounts on large volumes of vehicles can have a long-term negative impact on the residual or resale values of vehicles purchased at retail. This effectively increases the cost-of-ownership for retail buyers when they eventually sell or trade-in their vehicles.

About Honda
Honda employs more than 33,000 associates in North America, and has invested more than $22 billion in R&D, sales and manufacturing operations in the region since 1959. Honda now operates 14 major manufacturing facilities in North America, producing a wide range of Honda and Acura automobiles, engines and transmissions, Honda all-terrain vehicles, and power equipment products, using domestic and globally sourced parts. Over 90 percent of Honda and Acura automobiles sold in the U.S. during 2012 were produced in North America.

By Jeffrey N. Ross