Honda dealerships in the U.S. are reluctantly preparing for a cut to their profit margins, reports Car Scoops.
Following a similar move in Canada, Honda dealerships in the U.S. will see a 0.5% drop in the invoice price they pay for new vehicles and the MSRP, according to a corporate memo. Dealers will also face a fixed marketing allowance of $150 per vehicle.
Additionally, beginning with 2025 models, Honda is cutting its Service Pass program from offering two years of complimentary routine maintenance to just 12 months.
The changes are slated to begin taking effect on May 1. Brian Kanyan, chairman of the Honda National Dealer Advisory Board, said dealerships will see an impact on their bottom line and will likely need to make changes, such as introducing extra fees in an effort to compensate for the profits they’re losing.
“Obviously, Honda dealers are not happy about the change,” an unnamed dealer told Car Scoops. “We don’t think the change is appropriate but it’s also not necessarily surprising.”
