Toyota and Honda have both announced recently that they will cut their production to bring their supply of vehicles in line with consumer demand. Japan’s top two automakers resisted production cuts longer than the rest of the industry, but because new car sales haven’t bounced back quickly, Toyota and Honda have been forced to make cuts.
Toyota currently has 80-90 days of inventory, meaning that currently there are enough Toyotas made to match 80-90 days of sales. Toyota’s goal is to cut that number in half by the second quarter of 2009.
Honda is also cutting its production in order to lower its 100 days of inventory by one third down to 65-70, according to the Wall Street Journal. Honda is also planning to cut its part-time workforce completely. More than 3,000 Americans are employed by Honda part-time, CNN Reports.
So with huge inventories and planned production cuts, right now is the ideal time to buy a new Toyota or Honda. The companies will offer large incentives while they have extra cars sitting around, but once they bring the supply in line with demand, those incentives might disappear.
Even the popular Toyota Camry and Honda Accord are selling with heavy incentives and rebates right now, but don’t expect this to last forever.