Honda Motor Co. will rely on increased availability of crossover sport-utility vehicles to continue its momentum in the U.S. market, a top executive said at an event in Detroit.

John Mendel, head of the company's U.S. operations, said the Japanese company's North American production plan is being altered to increase output of a redesigned version of the popular CR-V that goes on sale in the coming months. Once considered a niche alternative to Honda's sedans, the CR-V is among the best sellers in the entire American market, competing with the Civic as the company's highest volume product.

Honda, long touting its strategy to have the flexibility at its plants to allow immediate shifts in model mix, relies on light-trucks for about half its U.S. volume. Accord, Civic and other sedans make up the remainder. Mr. Mendel said Honda has lost opportunities to gain more market share because of shortages of certain light-truck models on dealer lots.

Dealers of Honda and other products have consistently said buyers increasingly want SUVs and pickups amid cheaper gasoline, and that shoppers are walking away from bread-and-butter sedans and compact cars. Honda has in recent years revamped its Pilot SUV to respond and recently reintroduced its Ridgeline midsize pickup truck, but it has also seen strong demand for its redesigned Civic small car.

The CR-V, competing with Ford Motor Co.'s Escape or Fiat Chrysler Automobiles NV's Jeep Cherokee, is being retooled so that it is slightly bigger than the model currently sold, and available with more fuel-efficient options. Honda is moving CR-V production out of Mexico to boost availability of the smaller HR-V crossover, and will now have CR-V capacity in Indiana, Ohio and Ontario.

Mike Shaw, who owns auto dealerships in Colorado, Texas and Louisiana, said his Honda stores are "definitely short" on certain SUVs and sales of the new Ridgeline truck are brisk. He's struggling to get enough supply of those vehicles to keep up with demand.

"If the business would slowdown 10%, we'd be better off," he said. "It's not terrible but there is a shortage."

While the overall U.S. light-vehicle market is up modestly over 2015's record pace, retail sales at dealerships have declined, prompting some auto makers to rely more heavily on fleet sales. Deliveries of pickups, vans, and SUVs, however, remain brisk on the retail level and light trucks now represent nearly 60% of the vehicles sold in America, according to Autodata Corp.

Mr. Mendel said Honda and General Motors Co. are the only auto makers gaining steam on the retail-vehicles. Overall, Honda, Fiat Chrysler and Nissan Motor Co. are the three companies among the big-six sellers in the U.S. to gain market share on an absolute basis in 2016. Mr. Mendel expects Honda to set U.S. sales records in 2016 and 2017.

Christina Rogers contributed to this article

Write to John D. Stoll at john.stoll@wsj.com

 

(END) Dow Jones Newswires

October 13, 2016 10:55 ET (14:55 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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