Honda is reportedly slashing margins for its dealers in Canada by up to 44 percent in some cases. Framed as a necessary step in Honda’s transition to electric vehicles from internal combustion engines, the margin cuts apply across the lineup to varying degrees. Dealers appear to be both frustrated by the loss of income and prepared to pass the costs on to consumers.
The move was reported by Autonews Canada, which interviewed several Canadian dealers and other “industry sources with knowledge of the matter.” According to these sources, profit margins typically range from around 4.5 percent to about 8 percent, depending on the model. The proposed cut of at least 2 percent would decrease profit margins by approximately 44 percent on the lower end of the scale. In practical terms, a 2 percent reduction amounts to $700 less on a vehicle priced at $35,000.
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