Honda defies small-car slump with strong Civic sales
American Honda had a very good August, led by two crossovers, but the significant news is how well Honda and its luxury Acura brand are doing with cars. That goes for the Civic compact in particular. Though competitors, including General Motors and Ford (The Cruze, Impala, Focus, and Fiesta are all on the chopping block or already dead in America), have retreated from the small-car market as SUVs and crossovers have moved to the forefront, Honda remains dedicated to the conventional automobile. And the numbers show that a a good chunk of buyers still want passenger cars.
Sales of the CR-V utility vehicle were up 28 percent to a record 44,235 units, and the smaller HR-V had its best August to date, according to Automotive News. Still, the Civic had a 26 percent increase over last August, and sales of the Civic in general are up by 1.3 percent over the first eight months of this year. Nearly a quarter, 24 percent, of all Honda-branded vehicles sold were Civics, which also represent fully half of Honda car sales. The Accord, Fit, and Insight hybrid all showed sales increases, with all car sales at Honda up 20 percent from last year. Light trucks, which include SUVs, crossovers, and the Ridgeline pickup truck, were up 16 percent.
Bucking the industry trends with its “cars matter” mantra, almost half of all Hondas sold, 47 percent, were cars, compared to 29 percent for the industry as a whole in North America. Though Honda incentives in August were up 16 percent, compared to the same month last year, they are among the lowest in the industry. Also, Honda does not do fleet sales, which can boost sales figures without generating a lot of profit. Honda is currently averaging $1898 per vehicle in incentives this year, according to Motor Intelligence, compared to $1540 at red-hot Subaru, $2057, at Toyota and $3520 at Kia.
“Do people want passenger cars? Yes,” said Steven Center, VP in charge of auto sales for American Honda. “Forty-seven percent of our sales are passenger cars [at Honda], and we’re picking up share in the passenger car segment—almost two points compared to the other mainstream brands,” he said in an interview with Automotive News.
The fact that the Civic comes in many flavors, sedan, coupe, hatchback, and even the Type R track special, has helped make the Civic the top vehicle choice for millenials and first-time car buyers.
Analyst Jessica Caldwell, at Edmunds, attributes the Civic’s continued success in the SUV era to the need for basic transportation and Honda’s good reputation.
“Civic has successfully endured the market shift toward SUVs because there is still a strong demand for cheaper, basic transportation at a price point below small SUVs. Civic fills this niche with a reliable brand name that has been a standout in the segment for decades,” Caldwell told AN.
“Since price-sensitive car shoppers are less likely to take financial risks, Honda’s reputation for longevity and quality makes Civic a safer prospect,” Caldwell added. “The largest source of sales comes from prior customers, so with high quantities of Civics sold throughout the years, the buyer base is massive and is only going to expand as other brands shutter their car lines.”
“I think all the stars lined up right,” Center said about the Civic’s surge in sales. “We had the supply, we had the message, we had the offers and we had the market.”
As long as traditional cars continue to drive better and consume less fuel than comparable crossovers, we’re on board. Especially since you can get the Civic with a damn good manual transmission.