US: Honda and Nissan exchange blows, also signal upcoming woes image

The two top Japanese automakers have been engaged in a ring fight these days in the US, one of their most important global markets, but also corroborated their warnings towards upcoming issues.

The trading punches process also saw them on the same level in some areas, warning of woes to come if the US market loses the steam and starts a slowdown process. Sales of certain major automakers surprisingly lost steam last month, leading to worries by analysts and industry experts that companies would start making risky strategy moves in order to reach positive levels again. “As we see the industry flatten, nobody is flattening production volumes,” warns Honda of America Executive Vice President John Mendel. During a media encounter on the sidelines of the New York International Auto Show the executive was called upon Nissan’s readiness to increase sales past Honda – claiming the larger Japanese rivals were only increasing incentives and delivering 28% of sales into the fleet segment – traditionally a low-profit generator.

On the other hand, Jose Munoz, the chief of Nissan North America said Nissan was actually lowering the fleet deliveries by 17 percent in 2015, adding its focus was primarily on the more profitable commercial fleet segment, instead of traditional rental markets. Additionally, according to an analysis from data provider TrueCar, the average transaction price (ATP) last month surged 2.1 percent from the same period last year, standing at $32,201. And while incentives on average were reduced by $34 to $2,691, among the exceptions were both Honda and Nissan. While analysts and industry experts, together with auto executives are still upbeat about the prospects of the US auto market, the real test for the automakers is coming – sooner or later – as the hot pace of the past two years is expected to vein off and the companies traditionally have trouble relinquishing market share.