Honda will increase production of its Civic sedan at the automaker’s plant in Alliston, Ontario. The company says demand for entry-level vehicles is growing in Canada.
This is hardly surprising, given the general rise in prices across the industry.
Automotive News cited Honda Canada COO Dave Jamieson, who said the company has a long list of orders for the Civic, even though it lost its title as Canada's best-selling car last year, after holding it for 24 years.
He told the outlet, “It wasn’t because customers didn't want to buy them, we just couldn't build them.”
Fair enough, but consumers aren't fooled either. In Canada, the price of the model jumped from around $20,000 (old generation) to about $28,750 between 2020 and 2023. Buyers have turned elsewhere, including to the Toyota Corolla, which now sells for less than the Civic.
In fact, the Corolla was the best-selling car in Canada in 2022, with 33,096 units, ahead of the Civic and its 29,722 sales, which is still very robust. But there was a time, not so long ago, when Honda sold over 60,000 Civics annually in Canada.
The Alliston plant, it produced 123,322 Civics last year. That's 37 percent fewer than the 196,569 built before the pandemic, in 2019, according to Automotive News Research & Data Center.
Production "continues to be a challenge", said Jamieson, but the company will continue to increase Civic volume. As for the model's pricing, his view is that there’s a reality there’s no getting around: As raw material costs rise, vehicle prices “have to go up with them.” He added that reason the automaker has discontinued several entry-level models since the pandemic began is because it simply can't afford to produce them anymore.
To keep costs under control, Honda is focusing on efficiencies in the factory and within its supply chain, Jamieson said.
What may help the Civic is that SUVs have also seen their prices rise, which will force some consumers to consider returning to the car format. The hatchback version of the Civic, for example, may represent an interesting alternative.
The average price of a new vehicle in Canada reached a staggering $66,288 in the second quarter of this year. It was $40,386 at the end of 2019. Add to that interest rates that have risen dramatically over the past three years.
Against this backdrop, demand for the Civic remains strong, said Jamieson, and inventories are soaring.
L’usine d’Alliston a produit 123 322 Civic l’année dernière. C’est 37 % de moins que les 196 569 construites avant la pandémie, en 2019, selon le centre de recherche et de données d’Automotive News.
La production « continue d’être un défi », a déclaré Dave Jamieson, mais l’entreprise continuera à augmenter le volume de Civic. Quant aux coûts du modèle, il apporte une explication : « La réalité, c’est que l’augmentation des coûts des matières premières entraîne celle des prix des produits. ». Il ajoute que si le constructeur a supprimé plusieurs modèles d’entrée de gamme depuis le début de la pandémie, c’est parce qu’il ne peut tout simplement plus se permettre de les produire.
Pour garder un contrôle sur les coûts, il a ajouté que Honda se concentrait sur les gains d’efficacité dans l’usine et au sein de sa chaîne d’approvisionnement.
Ce qui peut aider la Civic, c’est que les VUS ont aussi vu leur prix grimper, ce qui va forcer certains consommateurs à peut-être revenir vers la voiture. La version à hayon de la Civic, par exemple, peut représenter une solution de rechange intéressante.
Le prix moyen des véhicules neufs au Canada a atteint la faramineuse somme de 66 288 $ au deuxième trimestre de cette année. Il était de 40 386 $ à la fin de 2019. Ajoutez à cela les taux d’intérêt qui ont crû de façon très importante depuis trois ans.
Dans ce contexte, la demande pour la Civic reste forte, a déclaré Dave Jamieson, et les stocks s’envolent.