Honda Motor Co., Ltd. anticipates a surge in demand for its hybrid and gas-powered models to drive sales in the United States throughout 2024. The Japanese automaker sets an ambitious target, aiming to sell 1.4 million vehicles this year, reflecting a 10% increase compared to the previous year.
Mamadou Diallo, a sales executive at Honda’s US subsidiary, outlines the company’s sales strategy for 2024. Honda aims to achieve this target by selling approximately 1.3 million units under the Honda brand and around 150,000 units comprising upscale Acura cars and SUVs.
In 2023, Honda experienced a substantial sales growth of 33%, reaching 1.3 million units. Notably, a quarter of these sales were attributed to hybrid models, including the gas-electric versions of the CR-V compact SUV and Accord mid-size sedan.
The Honda CR-V hybrid secured its position as the best-selling hybrid model in the United States in 2023, with sales totaling 197,317 units. Additionally, the Accord hybrid sedan claimed the title of the most popular hybrid-electric car, boasting sales of 96,323 units.
This impressive rebound followed a challenging 2022 when Honda faced supply and logistic challenges, resulting in its lowest sales in 25 years, with fewer than a million units sold. The company’s spokesperson attributes this decline to the difficulties encountered in the previous year.
Honda aims to sustain its sales momentum in 2024 despite challenges related to vehicle affordability and higher interest rates. Striking a balance between production levels and pent-up demand, the company expects normalized growth this year.
Two eagerly anticipated models, the Honda Prologue and Acura ZDX, are scheduled for initial deliveries early this year. These vehicles are being manufactured at an undisclosed General Motors (GM) plant. Despite GM’s electric vehicle-related production and software challenges causing delays in customer deliveries, Diallo expresses confidence that these upcoming models will contribute to achieving Honda’s sales target.
As of now, Honda Motor Co., Ltd. holds a Zacks Rank #2 (Buy). Other notable players in the auto industry, including Volvo (VLVLY) and Toyota Motor Corporation (TM), currently boast a Zacks Rank #1 (Strong Buy). Projections for VLVLY indicate year-over-year growth of 4.2% in sales and 73.1% in earnings for 2023. On the other hand, estimates for TM suggest 11% growth in sales and 47% in earnings for 2024. Both companies have experienced positive revisions in their EPS estimates, showcasing the market’s confidence in their performance.
