Honda exec: High auto prices may drop, but not dramatically

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Honda expects its factories to make more vehicles this year despite computer chip shortages and supply chain problems

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DETROIT – Honda expects its factories to make more vehicles this year despite computer chip shortages and supply chain problems. But since this year is starting with so few vehicles near dealers, the company expects US sales to drop from last year’s numbers.

The company expects US new vehicle prices to drop slightly from a record high of more than $46,000 in December as automakers ramp up production, but Dave Gardner, executive vice president of national operations, said prices will not fall to where they were before the pandemic. Were.

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A lack of new vehicles brought in by global chip shortages has forced Honda and other automakers to cut factory production at a time when demand is strong. This has reduced the supply of new vehicles, in some cases pushing prices higher than window stickers.

Honda, along with its Acura luxury brand, expects to sell about 1.4 million vehicles in the US this year, down from last year’s 1.47 million. Last year, the automaker started with 300,000 vehicles in its US inventory. Today it’s only 20,000, Gardner said.

“I think we are expecting that we are going to be able to build more than we did last year, but the pipeline has been emptied to such an extent,” he told reporters on Wednesday.

Jessica Caldwell, executive analyst at Edmunds, says Honda’s position is similar to that of the rest of the US industry. She expects production to increase, but says automakers have 75% fewer vehicles on dealer lots than a normal year. And many of them have already been sold.

As a result, people are currently paying $700 more than the sticker price for an average of $46,426. “I think the overage we’re seeing is probably going to be less,” she said.

Gardner said Honda is seeing a shortage of chips, and ports still closed, slowing the flow of parts to such an extent that Honda sometimes has to pay extra for air freight. He said the Omicron version of the novel coronavirus is also starting to affect factory workers, affecting production.

Honda also announced on Wednesday that it will introduce an all-new HR-V subcompact SUV this year, followed by a new CR-V compact SUV and a new Pilot large SUV.

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