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Honda to honor U.S. discounts on out-of-stock cars

A Honda sign is displayed outside SanTan Honda Superstore in Chandler, Arizona
A Honda sign is displayed outside SanTan Honda Superstore in Chandler, Arizona

DETROIT (Reuters) - Honda Motor Co <7267.T>, struggling to recover from the earthquake in Japan in March, told its U.S. auto dealers to honor discount offers, even on cars they do not have in stock, a spokesman said on Wednesday.

Honda and its Japanese rival, Toyota Motor Co <7203.T>, have seen production drop significantly since the earthquake and tsunami, leaving some dealers with insufficient inventory.

"We know we're going to have low inventories on some models -- Civic is the perfect example," Honda spokesman Gary Robinson said. "What we don't want to do is just send those people on their way without taking care of them."

The offer is not available on cars built in Japan, such as the Honda Fit and its hybrid models. Honda production outside Japan has also been curtailed by a lack of parts.

Its Acura dealerships are making a similar offer.

Discounts are offered to encourage sales of existing inventory and dealers typically do not offer promotional prices on cars they do not have available to sell.

The No. 3 Japanese automaker warned investors on Tuesday that operating profit could fall as much as 65 percent this year because it has had to delay the launch in the United States of major models, including its new Fit Shuttle and a new version of its top-selling Civic.

Honda -- as well as Toyota, which has forecast a 35 percent drop in profit in 2011 -- have had to slow the production of key models because some of suppliers have been unable to provide critical components since the quake and tsunami, which touched off the world's worst nuclear disaster since Chernobyl. Production fell by half in April, although both companies expect to recover more quickly than some investors initially feared.

Analysts have forecast that U.S. automakers, including General Motors Co , could gain market share this year as a result of the troubles of their Japanese rivals.

(Reporting by Deepa Seetharaman; additional reporting by Scott Malone; editing by Andre Grenon)

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