On this episode of Inside Automotive, CBT News anchor Jim Fitzpatrick is joined by Bill Feinstein, President of Planet Honda in New Hampshire, General Manager of Planet Honda in New Jersey, and the Chairman of the Honda National Dealer Advisory Board.
Feinstein notes that Honda was hit especially hard by supply chain disruptions and other manufacturing issues following the COVID outbreak. However, the manufacturer has made significant progress in returning production to pre-pandemic levels. Inventory may take more time to make a full recovery, Feinstein explains, since demand is still too high for the automaker’s output capabilities.
Affordability continues to be an issue for many Americans. Not only are car prices are at all-time highs, but interest rates and insurance premiums have driven monthly payments through the roof. “It’s always gotta be a concern when your customers is strained,” remarks Feinstein, adding that he expects pricing to improve once more inventory returns. However, he anticipates vehicle expenses will remain inflated so long as the Federal Reserve keeps interest rates above what a majority of consumers can afford.
The use of alternative ownership methods, such as leasing, saw a significant downturn during the pandemic due to rate hikes. As automakers and dealers begin to tackle affordability, leases are likely to be one of the first areas to improve, as it would allow many consumers to return to the market earlier than otherwise. Contrary to the norm, Feinstein notes that his stores saw significantly more leasing over the last two years, as his sales team recommended the method to buyers unable to afford new vehicles.
Electric vehicles are a hot topic in the industry, despite the market’s hesitancy to give up the reliability of the internal combustion engine. The biggest obstacle to EV ownership is the nation’s outdated charging infrastructure. With many young people lacking the capital to install at-home chargers, dealers face an uphill battle in terms of sales. Instead, hybrids, Honda’s specialty, have become a major commodity in today’s car market, as they give drivers more flexibility. Feinstein notes he and many other dealers are anxiously awaiting the arrival of the automaker’s first fully electric contender, the Afeela sedan.