December becomes special month for Honda dealers

Staff Writer
Columbus CEO

December becomes special month for Honda dealers

Dan Gearino

The Columbus Dispatch, Ohio

Central Ohio Honda dealers have found that their strong sales last December have made it a challenge to unlock an unusual incentive from the manufacturer.

Here's the incentive: If a Honda dealer sells more vehicles this month than it did last December, the store gets a $3,000 bonus for each car above the December 2012 total. Dealers can use the money however they want.

While these kinds of "dealer cash" incentives are not unusual in the industry, they are rare for Honda, analysts have said.

In central Ohio, Honda dealers sold 1,060 new vehicles in December 2012, up 25 percent from the previous year, reported. Honda was the region's top-selling brand -- nearly doubling the runner-up, Ford -- bolstered by the recent debut of the redesigned Accord and other factors.

"Last year's numbers are a pretty high goal," said Jim Erwin, sales manager at Roush Honda in Westerville.

Because of this, most dealers didn't hit their incentive targets until late in the month.

While dealers are beginning to see the incentive pay off, customers have been confused. Some buyers, having read news reports about the promotion, are reportedly asking for a $3,000 discount off the sticker price, which isn't how the incentive works. The incentive was first reported in theWall Street Journal.

All of this might lead to headaches for dealers, except for one important point: Sales have been strong.

At Hugh White Honda, business has been brisk all month, with rapid sales across the vehicle lineup, said Don Smith, the general manager.

Several dealers said they are viewing the incentive as an opportunity to give a small discount on all vehicles, as opposed to just the small number of vehicles that qualify once the December 2012 figure has been exceeded. This may translate into a few hundred dollars per vehicle.

National new-car sales will likely be flat this month, according to a forecast from J.D. Power and Associates and LMC Automotive. The research firms project that dealers will report sales of 1.13 million vehicles for the month, which would be down slightly from 1.14 million last year.



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