P&A Providers & Administrators
MenuMENU
SearchSEARCH

Honda Chides Rivals Using Fleet Sales, Subprime Lending

August 20, 2014
3 min to read


Honda Motor Co., losing share in the growing U.S. auto market, chided competitors for using low-margin fleet sales and over-reliance on subprime lending to boost sales, reported Bloomberg.


Excluding rental and business-fleet sales, which Honda eschews, Accord topped Toyota Motor Corp.’s Camry, the U.S. passenger-car volume leader, with 181,939 deliveries in the first half, Honda said, citing IHS Automotive data. Camry retail sales were 178,183, according to IHS’s Polk unit. Honda, which doesn’t have a fleet sales division, also isn’t using subprime lending or loans with durations as long as seven years to boost business, John Mendel, executive vice president of U.S. sales, said yesterday on a conference call.

Ad Loading...


“In addition to a heavy reliance on fleet sales to boost volumes, we are seeing some of our competitors adopt short-term tactics to stoke sales, like big jumps in subprime lending and 72-month terms,” Mendel said, without naming specific companies. “We have no desire to go there.”


Honda, fifth in U.S. volume, had a 1.3 percent drop in sales of Honda and Acura brand autos this year through July, while industrywide deliveries expanded 5 percent. The Tokyo-based company attributes the slowdown to the delayed release of its redesigned Honda Fit hatchback and Acura TLX sedan, both of which were due in the first half of 2014.


The company’s Civic compact and CR-V sport-utility vehicle also are the retail sales leaders in their segments.


Honda avoids large-scale fleet sales as a long-term strategy to maintain resale values for its models that rank among the industry’s highest.


‘Dark Underbelly’

Ad Loading...


“We probably should care and differentiate between retail and overall sales, because retail sales are generally much more lucrative,” said Jack Nerad, senior analyst for Kelley Blue Book. “That’s why Honda is so adamant about this.”


Rising incentives, fleet sales and ever longer loans are the “dark underbelly” of the U.S. auto sales expansion this year, Nerad said.


Industrywide incentives averaged $2,883 per vehicle in July, up 13 percent from a year earlier, according to Autodata Corp. Honda spent an average of $1,834 per vehicle, up 3.7 percent from a year earlier, while Detroit-based General Motors Co., Ford Motor Co. and Fiat SpA’s Chrysler Group each offered customers at least $3,400 per vehicle. Per-vehicle spending for Toyota averaged $2,188 in July and Nissan Motor Co., which has a goal of outselling Honda in the U.S., offered $2,891, according to Woodcliff Lake, New Jersey-based Autodata Corp.


2014 Goal

Along with Accord and Civic topping Toyota’s Camry and Corolla as the best-selling cars in their categories to individual buyers, Honda’s CR-V sport-utility vehicle ranks as the retail leader among SUVs and has the most total sales of any SUV in the U.S. for the 10 years through June, the company said.

Ad Loading...


Even with the slow start that pulled down Honda’s market share to 9.1 percent through July from 9.7 percent a year earlier, the company will post its best-ever U.S. sales in 2014, Mendel said in a phone interview. Combined Honda and Acura auto sales peaked at 1,551,542 in 2007, before the U.S. recession hit.


“We’ll beat that by at least one,” he said.


Honda’s U.S. sales unit is based in Torrance, California. The company’s American depositary receipts fell 0.1 percent to $34.08 at the close in New York yesterday. They have declined 18 percent this year before today.

More Industry

Kia Niro SUV in gold color parked outdoors
Industryby Hannah MitchellSeptember 1, 2026

Kia Closes Out Summer With a Bang

Its U.S. subsidiary broke multiple records in August, in part due to a surge of demand for hybrids models.

Read More →
Outside of Auto Park Ford dealership
Industryby Lauren LawrenceSeptember 1, 2026

Indiana Dealership Changes Hands

A 30-year-old Ford dealership in Indiana has a new owner and will soon be undergoing renovations to meet manufacturer requirements.

Read More →
Three men standing in front of two classic cars handing off gift.
Industryby Hannah MitchellAugust 25, 2026

Texas Dealership No Longer in the Family

The Ford store, a longtime cornerstone of the Houston market, is now part of one of the fastest-growing U.S. auto groups.

Read More →
Ad Loading...
Outside of modern car dealership “Genesis of San Bruno
Industryby Lauren LawrenceAugust 25, 2026

Genesis Grows California Presence

The Cardinale Automotive Group opened its third Genesis rooftop in the Golden State, Genesis of San Bruno, a stand-alone dealership serving the San Francisco Bay Area.

Read More →
Red Honda Civic hybrid sedan on two lane road with green hills in background
Industryby Hannah MitchellAugust 21, 2026

August Auto Sales a Mixed Bag

An early forecast shows strong business despite consumer hurdles, and hybrids are a big piece of their affordability coping strategy.

Read More →
EV charger inserted into dark-colored car port
Industryby Hannah MitchellAugust 18, 2026

EV Market Humming Along

July sales show steady growth as the segment stabilizes from last year’s artificial surge following pullback of federal support.

Read More →
Ad Loading...
car in background with hand giving a thumbs up in front
Industryby Lauren LawrenceAugust 14, 2026

Auto Loan Delinquency Rates Stabilize

Auto loans are a main driver of nonmortgage consumer debt, but delinquency rates stabilized in the second quarter across all credit risk tiers.

Read More →
blue sky, yellow and orange rollercoaster with riders going up an incline
Industryby Lauren LawrenceAugust 12, 2026

EV Sales Recover in Q2

The EV sales roller coaster continues as numbers show improvement, but industry experts predict a year-over-year third-quarter decline and fourth-quarter jump.

Read More →
Photo of blue Toyota Prius parked next to body of water with city skyline in background
Industryby Hannah MitchellAugust 5, 2026

The Cheapest Hybrids to Fuel

The powertrain is increasing in popularity, in no small part due to its fuel economy. A new report lists the most efficient hybrids on the market.

Read More →
Ad Loading...
white SUV parked in front of a body of water with a gray sky background
Industryby Lauren LawrenceAugust 5, 2026

Hybrids and SUVs Gaining Ground

The most recent Kelley Blue Book Brand Watch found that only two nonluxury brands increased in shopper consideration, buoyed by their hybrid and SUV offerings.

Read More →