News Column

Honda Says Sorry About the Lack of Electric Fits

June 18, 2013

David Undercoffler

Honda Fit EV (photo: American Honda Motor)
Honda Fit EV (photo: American Honda Motor)

Honda issued a rare apology last week to frustrated customers who were having difficulty finding the electric version of its popular Fit hatchback.

Honda has seen a rush of interest in the low-volume Fit EV since dropping the lease price in late May, to $259 from $389. The deal requires no money down, has no mileage limit, and includes a free in-home charger and collision insurance.

One Santa Monica dealership said it had three of the cars sitting on the lot for months. Just after Honda's announcement, all three were snatched up by customers in a single morning and a waiting list formed.

Honda saw similar interest nationwide. After leasing just 176 Fit EVs during the first 11 months the car was available in the U.S., the lease deal moved another 144 off dealer lots in the first two weeks of June alone.

Dealers sold out of the model in Southern California and elsewhere, but more Fit EVs are on the way, Steve Center, Honda's vice president of Environmental Business Development, said in a statement. He apologized to buyers for their difficulties finding the car.

"We recognize that some customers have experienced frustration as they attempt to locate dealers with available Fit EVs," Center wrote. "We sincerely apologize for this."

Center emphasized that more Fit EVs were headed to the U.S. and would be available at about 200 qualified dealers in the eight states where the car is sold.

"Bottom line: Honda is bringing more Fit EVs to our U.S. dealer every month, and those future shipments are not sold out," Center wrote.

The Fit is available in California, Oregon, New York, New Jersey, Massachusetts, Maryland, Rhode Island and Connecticut.

Those new cars are coming into the country at a rate of about 40 cars a month, according to Honda spokesman Chris Martin. Honda plans to make only 1,100 of the all-electric Fit cars for the U.S. market. The company has no plans to increase production of the car.

"We think 1,100 is still a realistic number for people who are really going to live with an EV," Martin said. "We don't want it to be a rash decision, because then they might not be happy."

Honda also loses money on each electric Fit it builds, so there is little financial incentive to increase production. Those losses were compounded when the automaker lowered the monthly lease rate.

It's also much more difficult to increase production on such a specialized car like an EV than a gas-powered car built on a much larger scale. "We can't just call up a supplier and say we need 10,000 more," Martin said.

An automaker facing limited supply of new or updated vehicle isn't a new phenomenon, though apologizing for it is fairly uncommon, said Alec Gutierrez, a senior analyst at KBB.com.

"Why apologize just because you've put out a great product at an attractive price point?" Gutierrez said. "Just because demand is outpacing supply doesn't demand an apology."

One reason for the apology may be to keep interest in the Fit EV high, Gutierrez said. The move also could keep customers from looking elsewhere for an affordable lease deal on an all-electric vehicle.

In recent weeks a price war has broken out among manufacturers who need to sell the vehicles in California to meet state regulations. Thus, Fiat, Chevy and Nissan all announced lease deals of $199 per month on the 500e, Spark EV and Leaf, respectively, while Chevy this week added rebates of up to $5,000 on its Volt plug-in hybrid.

david.undercoffler@latimes.com

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