At the rate of decline in production numbers soon you won't even be able to buy a Fit. Apparently Honda just doesn't care about those of us who want a small, fuel efficient car.

 

some lucky person bought one NSX last month

 

Honda is a corporation. They are in business to make a profit. They make this profit by selling the most profitable vehicles that they can.

If, for example, you made $3000 on every Odyssey that you sold, and $1000 on every Fit that you sold, where would your interest be?

It is a general fact that bigger vehicles with bigger price tags create bigger profits.

No - I don't like it, but that is life.

 

I assume that every Fit sold results in some profit. Every Fit not sold results in no profit. Every potential Fit buyer who is turned away to another manufacturer not only results in no profit but also eliminates future profit from the sale of consumables, not to mention the loss of a manufacturer-customer relationship that could result in more vehicle purchases in the future.

 

Yes, but when the plants producing the vehicles are running at 100% capacity and have the option of producing higher-profit vehicles - what do you do?

Honda is in a very awkward position. They can sell every Civic and Fit that they can produce for the US, at this time. However, they don't have the plant capacity to produce any more.

The Fit is made in Japan. The plant makes Fit's for other places in the world, too. There are production numbers that they have targeted. The suppliers were given this info, and so they only have supplies for a certain number for each market.

There is a lot more to it than simply saying "they don't care" or "they are losing business" - they know this, and that is why another plant is in the process of being built in Indiana.

Honda is already manufacturing in East Liberty and Marysville, OH; Alabama; and Aliston, Ontario, Canada.

In addition, they just started building CR-V's at East Liberty, where they make the Civic 4dr models. So the plant in Japan is cranking out more Civic's instead of Fit's.

It's a headache for Honda. Granted, one that GM no doubt envies!!

 

Supply and Demand 101

Lots of demand for the FIT
Not much supply.
This creates an artificially high demand for the FIT and allows for much higher prices in some areas of the country.

This results in very high profit margins for some dealers which keeps them in business so they can remain afloat.

The FIT doesn't have much of a profit margin for the dealership when sold at MSRP. About $600. Bigger or sporty cars have a much larger profit margin so salespeople are happy to sell you anything but a FIT.

Some buyers looking at the FIT get disgusted with the long waits and high prices and find something else. If they are loyal to Honda they will find a CIVIC or maybe a used Honda from the dealership or maybe a small SUV.
Some will buy other brands but only reluctantly.

If Honda could increase production of the FIT they would. But there is always cost associated with that. Obviously we have shown that there is plenty of demand so that is no problem. Profits would be the same or larger but the key to selling low cost product is sell by volume OR sell at high price due to low supply.

Competitors are happy to use this time to hype up their own products and steal away buyers. So far nothing equals the design and versatility of the FIT but soon others will have micro cars with big interiors. A hybrid FIT would be a natural.

Small high mpg cars help Honda's car mpg average so loosing the Insight and gaining the FIT is important to Honda.

Interesting about the strong sales numbers from the Accord and CIVIC.

I hear that hybrids will be limited to mid to smaller sedans like the Accord and CIVIC while the bigger SUVs trucks and Minivans get turbo diesel engines in the future- No hybrids for them- doesn't work good enough and costs too much for the consumer. Toyota doesn't agree and will continue to try to make hybrids for larger cars and trucks.

 

Honda's China factory makes Fit too... there were talks to bring China-made
Fit to US. My friend visited China just few weeks ago... He said Honda Fit is everywhere on China streets.

 

<...>

I understand that there is only a limited supply, and I understand that Honda generally proceeeds very conservatively. There's no effective way to ramp up production, at least in the short to medium term.

Where Honda has done a terrible job, in my view, is something you can do something about: managing expectations.

Contrast my purchasing experience in 1999-2000. I put down a deposit for a Honda Odyssey. The dealer told me I would get it in February. We specified the color and trim elvel we wanted. They checked at the time we placed the order, and told us right then they couldn't get the color we wanted, so we went with our second choice. This was October of '99. February of 2000 rolls around, and bingo, our new car arrives. We got what we ordered when they said we would get it. Waiting four months is a downer, but everyone held up their end.

Fast forward to the present: I've been waiting three months, as of today, for a Blue Base Manual Fit. The dealer, back in July, said October. Three weeks ago they said November. I'm sure when I call them today they'll say something like January.

So let's compare and contrast here. Honda isn't going to change the way they do rollouts. So cars will be in demand. But the Fit furor has happened before, and it will happen again. Why not improve what you can to manage expectations better?

If you know you're only producing so many, and that you're going to allocate basically at random, why not allocate up front? It's only one year's worth of production we're talking about. That way, the dealers KNOW what they are getting, and we know, based on what we order, what we're getting, and when.

I'd much rather go to a dealer and be told something like, "No, you're too late", or "Yes, we have one like you want but the next available one is in January, do you want to wait?", with reasonable assurance it's coming, then what is really happening, which is, "We don't know what we're getting, we don't know when we're getting it, but put a deposit down and you might get lucky". I'll go for certainty over the lottery any day.

I'll wait months for a car I know is coming, and I thought that was what I was getting into based on my previous experience. Instead I've been waiting months and there is no guarantee I'll get the car. If there was a reasonable alternative I'd already be out of here.

 

A lot of this assumes that the Fit assy line was able to just keep ramping up production for the USDM. The reality is most likely to be that there were parts in their spply line for X number of USDM Fits, they peaked when the model year peaked. You will see a drop off because car sales drop off over the winter in North America. Then you will see a bigger push on the Fit in the 2008 model year, and probably a similar delivery/build curve.

BTW, the "trend" that so concerns the original poster is the same trend that you see with the Accord. Bumps in May and August production, with slightly smaller numbers in between.

I don't see the problem except that, as uual, Honda went conservative on production when rolling out a new model for a given market. Imagine if BushCo has squashed the price of gasoline back in May... There would probably not be that big run on Fits.

 

The smaller numbers between May and August are when they change over production from one model year to the next.

They "dial back" production to ensure proper quality control with the new tooling and changes.