An article from
Bloomberg today
reveals that Honda’s inventory of the Ridgeline pickup has risen to more than 100 days. The automaker has decided to
cut production of the pickup by 3,000 units next quarter in response. While it would have been difficult to predict the
current high price of gas that’s forcing consumers to reconsider large vehicle purchases, it may be that Honda picked a
bad time to take on the Big 3 in the full-size truck segment. Currently the automaker can’t keep up with demand for its
new Civic and, as mentioned previously, plans to
introduce another small car, the Fit, in the U.S. next year. Profit margins on these small cars are much smaller than
the money that can be made on the Ridgeline and other large vehicles like the Odyssey minivan. Honda will be raising
incentives on its light trucks, which include the Ridgeline and Odyssey, in order to move them off the lot and get its
inventory under control. [Thanks Joel for the tip]
Profitable Ridgeline isn't making money for Honda
An article from Bloomberg today reveals that Honda’s inventory of the Ridgeline pickup has risen to more than 100 days. The automaker has decided to cut production of the pickup by 3,000 units next quarter in response. While it would have been difficult to predict the current high price of gas that’s forcing consumers to reconsider large vehicle purchases, it may be that Honda picked a bad time to take on the Big 3 in the full-size truck segment. Currently the automaker can’t keep up with demand for its new Civic and, as mentioned previously, plans to introduce another small car, the Fit, in the U.S. next year. Profit margins on these small cars are much smaller than the money that can be made on the Ridgeline and other large vehicles like the Odyssey minivan. Honda will be raising incentives on its light trucks, which include the Ridgeline and Odyssey, in order to move them off the lot and get its inventory under control. [Thanks Joel for the tip]