Now more than ever, falling gas prices coupled with year-end promotions are making SUVs so much more enticing to the buying public. This is the backdrop that the 2105 Honda CR-V arrived to. The demand for it was evidenced in the fact that the latest CR-V model had buyers queued up in front of dealerships when it was released in October.
Though the company has thus far struggled in the first half of the year, the more popular models—the CR-V included—have put forth a good showing and made up for the shortcoming of the other less popular models. This then brings us to two questions: what does it mean for investors and what are Honda’s plans for the CR-V?
A More Attractive CR-V
Ever since its introduction to the American market in 1997, the Honda CR-V has always found willing buyers. Americans simply loved the four-cylinder engine that came with the compact SUV. The fact that it was very much fuel efficient and boasted unequalled comfort made it even more popular and further bolstered sales in America.
There have been, of course, many modifications to the CR-V since then. It has continually evolved through the years. The 2015 version is much sleeker and trendier than its predecessors. It is also much safer to boot. All the changes were made by Honda with the CR-V’s target customer group in mind, which includes mothers, young professionals, and small families. Some fine features that the 2015 model boasts are cruise control, collision mitigating braking, and a lane assist system.
Infusion to Honda’s Sales
Analysts all over are predicting company-wide revenue of about $105 billion for the fiscal year of 2015. This is a large leap that is up by 6.8% over the last year. In order for these predictions to hold water, Honda needs to do well in the North American market, which accounts for about 40% of the company’s total sales. The momentum it will carry over during the last quarter of 2014 into 2015 will be crucial as the company did not get off to a big start in 2014, the result of which was an overcast shadow on the company’s near and medium term outlook.
Honda Investors Takeaway
While the continued decline in sales in the American market does not bode well for investors in Honda’s stock, its crossover segment has been witnessing solid growth. The mass appeal of the CR-V is a big factor for this. With clever features added to target the core customer group along with an increasing sales growth, Honda’s strategy appears to be working well thus far.