Honda will trim production of its flagship 2018 Accord at the company’s Marysville plant as sales have dipped and dealers say shoppers continue to bypass sedans in favor of SUVs.
More than 1,400 people from Clark and Champaign counties work at Honda and the carmaker employs more than 14,000 Ohioans overall.
The company hasn’t disclosed how much production will be cut but it won’t mean layoffs at the Marysville plant, said Caroline Ramsey, a spokeswoman for Honda of America Manufacturing. The plant will have two non-production days each month between April and the end of June, and will extend an annual shutdown in July.
Employees can use vacation time, or they can report to work and assist with duties outside of auto production, she said.
“If they want to come in we will make work available,” Ramsey said. “It just won’t be production.”
The 2018 Honda Accord began rolling off the assembly line in Marysville last year, after an investment of about $220 million and a redesign of a car that has been built in central Ohio for nearly three decades. The slow sales are in spite of the 2018 Accord being named the 2018 Car of the Year award earlier this year.
The manufacturer also had previously announced plans to add production at the Marysville plant of the CR-V sport utility vehicle this summer in order to keep up with demand from consumers. Some of the non-production days at the plant will be used to prepare for production of the CR-V.
That SUV already is produced at three other sites, including Honda’s nearby East Liberty plant.
“We try to have a disciplined approach to matching our production with market conditions,” Ramsey said. “It’s no secret that overall across the industry there’s been a decline in mid-size sedan sales.”
The latest sales figures from Honda show Accord sales are down about 13 percent compared to the same time last year.
It’s not uncommon for an auto manufacturer to adjust production, said Stephanie Brinley, an analyst for IHS Markit. But she said the move is being watched because of a competitor’s recent success and because the Accord has routinely been named among the best in its class.
“It’s getting a lot of attention partly because the (Toyota) Camry has had a good couple of months and it’s partially getting notice because Accord is launching to critical success,” Brinley said.
The Accord’s sales figures are more about demand for SUVS than competition from Toyota, said Dan Nagel, general manager of White Allen Honda in Dayton.
“There’s a little bit of an oversupply but mostly it’s not because of the competition,” Nagel said. “It’s the sedan market as a whole is down and it has been for the last year and a half because everyone wants an SUV. Now, SUVs ride like a sedan, they get gas mileage like a sedan and people just feel more comfortable sitting up a little bit higher than a typical sedan.”
The Accord was Honda’s top seller for years, he said, until the CR-V outpaced it.
“That’s fine with us,” Nagel said. “We’ll cater to what the market bears. If customers want SUVs, we’ll sell them SUVs.”
Before the recession, Brinley said automakers tended to offer incentives to boost sales and keep plants running. Since then manufacturers have become more cautious.
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“What Honda is doing is being very careful about the launch of the Accord and ensuring as best they can the quality of sale over the quantity of sale,” Brinley said. “They want to make sure they don’t get overly reliant on incentives or financial inducements because in the long run, those can hurt residual value and they can create a false sense of demand.”
The production cut is unlikely to be a massive overhaul, Brinley said.
“We’re not necessarily looking for example at Honda building half as many Accords,” Brinley said. “It’s not that kind of an adjustment. It’s much more of a tweak and if on the flip side if you’re selling more CR-Vs, which are also being added to that plant and you can flex between the two, Honda can be in a fairly good position to make sure they have the products they need and making sure the plant is active enough.”
Workers at the Marysville plant produce both the Acura ILX and TLX models along with the Accord and the upcoming addition of the CR-V. The plant can produce about 440,000 total vehicles a year, Ramsey said.
“We’ve always considered flexibility a hallmark of Honda success in this market,” Ramsey said. “We’ve adjusted and ebbed and flowed to meet market conditions and we’ll do that again.”