(July 5, 2011) In a memo to dealers Friday, Honda warned that a significant drop in U.S. sales could be expected in July and August because of dwindling inventory, according to a story in the Monday editions of the Wall Street Journal.

The memo has set a sales goal of 142,500 vehicles in those two months, the Journal reported. That would represent a 36 percent decline from the 221,166 units it sold in the same period last year.

The shortage of vehicles continues to be due to a shortage of supplies and production interruptions stemming from Japan's march 11 earthquake.

"It is apparent that most dealers across the country will hit their lowest inventory levels sometime in July and early August," the memo said. "It will be late August before we start to see an on-ground recovery of product."

Honda told its dealers that production should ramp up by fall.

Source: The Wall Street Journal