Honda Canada Inc. is bracing for an additional 12 months of provide chain disruption that may hold inventories on seller heaps underneath strain and certain lead to greater car prices for customers.

In a company-led roundtable Wednesday, CEO Jean Marc Leclerc stated Honda continues to “handle this maze of complexity” to optimize its manufacturing, however that 2022 is shaping as much as be a continuation of 2021 relative to provide chain and stock points.

Via components of final 12 months, managing Civic and CR-V meeting in Alliston, Ont.  required flying in components from Southeast Asia to bypass clogged seaports, LeClerc stated. It’s simply one of many pricey changes the corporate has been pressured to make to maintain manufacturing strains operating.

“Whether or not we’re speaking logistics, whether or not we’re speaking uncooked materials, it’s all driving up the price of manufacturing and the prices that, sadly, we have to handle.”

Leclerc stated challenges getting components by way of common delivery channels have lingered and it’s unclear when the congestion will ease.

“It’s definitely there and will likely be one thing that we’ve to handle on a go-forward foundation.”

As with different automakers, the microchip scarcity additionally continues to nag Honda. On that entrance, Leclerc sees provides “stabilizing” by the third or fourth quarter of 2022, however expects a full restoration will show elusive this 12 months.

Confronted with rising prices throughout the board, Leclerc stated it’s turning into tough for the corporate to defend customers and take in the mixed value will increase itself.

“Realistically we’re dealing with worth modifications in 2022 to attempt to mitigate that strain.”

Sellers, in the meantime, might want to proceed working with lighter inventories.

The corporate’s Canadian output has dropped significantly because the onset of the COVID-19 pandemic. Honda constructed 292,189 automobiles in Alliston final 12 months — break up roughly evenly between Civic sedans and CR-V crossovers. This compares to 355,513 in 2020 and 407,764 in pre-pandemic 2019, based on the Automotive Information Analysis & Information Middle.

The automaker’s Canadian manufacturing operations have a serious influence on stock availability, with 72 per cent of the automobiles Honda bought in Canada in 2021 coming from its Alliston meeting vegetation, based on Leclerc.

Regardless of the change from the normal mannequin of 60 to 90 days of stock on-hand at sellers, Leclerc stated the provision chain points have uncovered some advantages of operating leaner.

“There’s value financial savings by way of their stock financing, by way of creating in all probability a greater expertise on a showroom flooring, by way of giving clients precisely what they need.”

Honda is waiting for long-term takeaways from the unplanned stock scarcity, with changes that will let sellers function with much less stock and make use of a build-to-order method on the desk, Leclerc stated.