Honda is going to start squeezing dealer margins here soon. Starting in Canada, and will come to the US. Also, parts and accessory pricing will be increased starting next month.
If you are looking for a Honda, now might be the time to get into one. If you are selling Honda, it’s going to become tougher to make money.
Honda’s profit margins are already narrow.
I sell Hondas, and when I mentioned this to the sales manager and the top salesperson, they seemed unconcerned and assured me it wouldn’t happen in the U.S., even though the evidence suggests otherwise.
Since most of my business was done much closer to invoice than MSRP to compete with weaker competitors, I’m not too worried. It will be frustrating to be the highest-grossing Honda dealer in the area without making much profit, but I’ll just need to push for an increase in used car inventory again. I can handle 300 used cars and 70 new ones instead of the other way around.
All the Honda dealers I know mention that their main challenge is securing enough inventory. My preferred dealer used to sell 500 new cars a month before the pandemic and mentioned that he could have sold an additional 150 to 200 if he had the stock. I believe these dealers will manage to survive.
Are you asking if there will be an increase in the invoice price, or if both the invoice and MSRP will rise while profit margins decrease?