"Honda Slips Into Reverse" - BW article
04-13-2010, 05:06 PM
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"Honda Slips Into Reverse" - BW article
Business Week article, outlining Honda's market share losses and loss of momentum recently.
http://www.businessweek.com/magazine/conte...74024664807.htm
http://www.businessweek.com/magazine/conte...74024664807.htm
While competitors have benefited from Toyota's woes, U.S. market share for the "Japanese BMW" is falling
Cheap leases helped sales but didn't stop the share slide Justin Sullivan/Getty Images
By David Welch
Given the troubles of archrival Toyota, Honda should be cleaning up this year. It isn't working out that way. After a decade of nonstop growth in the U.S., Honda Motor (HMG) fell from a 10.5% share in the first quarter of 2009 to 10.1% in the same period this year. (Rival Nissan Motor now has 9%, up from 7.9%, and Hyundai Motor is up to 4.4%, from 4.2%.) Honda "has lost its mojo with new model launches," says Jessica Caldwell, a senior analyst at car shopping site Edmunds.com.
While Honda's sales are up 12.5% from last year's dismal first quarter, the overall market grew by 17.1%. The company once offered a sportier alternative to stodgy-but-reliable Toyota Motor ™, but Honda's cars now look pale alongside newer models from Nissan, Hyundai, Ford (F), and General Motors, says John Wolkonowicz, an analyst at IHS Global Insight. With its reputation for performance and handling, Honda "used to be the Japanese BMW," Wolkonowicz says. "It's not anymore."
Honda declined to make any executives available for this story. A spokesman says the company isn't concerned about market share; it is profitable and remains focused on providing reliable, safe, efficient cars. Nonetheless, Honda in March offered cheap leases to battle 0% financing deals from Toyota as that company sought to shore up sales in the wake of its recall problems. Honda's program boosted interest somewhat, but the market-share slide continued.
OUTSOLD 2 TO 1
The new Accord Crosstour is emblematic of Honda's woes. Honda launched the model in November, billing it as a mash-up of an SUV and a sedan. Trouble is, the Crosstour has neither the room of most SUVs nor the look and feel of a sedan, says James N. Hall, principal of 2953 Analytics, an auto consultancy in Birmingham, Mich. And the Crosstour only comes with a V-6 engine, pushing the price to $30,000. Not only is it about $3,000 more than Toyota's competing Venza but it also uses more fuel. This year the Venza has outsold the Crosstour by nearly 2 to 1.
Honda has similarly stumbled with the Insight. During the hybrid's splashy relaunch last year, Honda pitched it as a less expensive alternative to Toyota's Prius. In 2010, Honda has moved fewer than 5,000 Insights in the U.S., about one-sixth the number of Priuses Toyota has sold. And in March, Ford's Fusion hybrid edged out the Insight 1,670 to 1,652 even though the Fusion costs some 35% more. While the Fusion is roomier, it gets nearly the same gas mileage, about 40 miles per gallon.
Even Honda's core models are under pressure. The Civic compact, the No. 6 seller in the U.S. in 2009, is No. 7 this year, researcher Autodata reports, and sales of the CR-V are off by 4.2%. And while Accord sales are growing, Honda opted for more conservative styling when it relaunched the sedan last year. Now potential buyers are exploring other options; a year ago, only 5% of visitors to Edmunds.com interested in the Accord also checked out the Hyundai Sonata, and 6% looked at Ford's Fusion. This March, 12% of Accord shoppers considered the Sonata and 9% gave the Fusion a look.
One such shopper is Charles Summers, who works for a human resources firm near Atlanta. With his first child on the way, Summers figured he would trade his 2007 Hyundai Elantra for an Accord. But he found the styling bland and felt the Sonata was more comfortable. So he spent $26,000 for a Sonata, while a similarly equipped Accord would have cost more than $28,000. "I thought for sure I'd end up with an Accord," Summers says. And that's how market share slips away.
Welch is BusinessWeek's Detroit bureau chief.
Cheap leases helped sales but didn't stop the share slide Justin Sullivan/Getty Images
By David Welch
Given the troubles of archrival Toyota, Honda should be cleaning up this year. It isn't working out that way. After a decade of nonstop growth in the U.S., Honda Motor (HMG) fell from a 10.5% share in the first quarter of 2009 to 10.1% in the same period this year. (Rival Nissan Motor now has 9%, up from 7.9%, and Hyundai Motor is up to 4.4%, from 4.2%.) Honda "has lost its mojo with new model launches," says Jessica Caldwell, a senior analyst at car shopping site Edmunds.com.
While Honda's sales are up 12.5% from last year's dismal first quarter, the overall market grew by 17.1%. The company once offered a sportier alternative to stodgy-but-reliable Toyota Motor ™, but Honda's cars now look pale alongside newer models from Nissan, Hyundai, Ford (F), and General Motors, says John Wolkonowicz, an analyst at IHS Global Insight. With its reputation for performance and handling, Honda "used to be the Japanese BMW," Wolkonowicz says. "It's not anymore."
Honda declined to make any executives available for this story. A spokesman says the company isn't concerned about market share; it is profitable and remains focused on providing reliable, safe, efficient cars. Nonetheless, Honda in March offered cheap leases to battle 0% financing deals from Toyota as that company sought to shore up sales in the wake of its recall problems. Honda's program boosted interest somewhat, but the market-share slide continued.
OUTSOLD 2 TO 1
The new Accord Crosstour is emblematic of Honda's woes. Honda launched the model in November, billing it as a mash-up of an SUV and a sedan. Trouble is, the Crosstour has neither the room of most SUVs nor the look and feel of a sedan, says James N. Hall, principal of 2953 Analytics, an auto consultancy in Birmingham, Mich. And the Crosstour only comes with a V-6 engine, pushing the price to $30,000. Not only is it about $3,000 more than Toyota's competing Venza but it also uses more fuel. This year the Venza has outsold the Crosstour by nearly 2 to 1.
Honda has similarly stumbled with the Insight. During the hybrid's splashy relaunch last year, Honda pitched it as a less expensive alternative to Toyota's Prius. In 2010, Honda has moved fewer than 5,000 Insights in the U.S., about one-sixth the number of Priuses Toyota has sold. And in March, Ford's Fusion hybrid edged out the Insight 1,670 to 1,652 even though the Fusion costs some 35% more. While the Fusion is roomier, it gets nearly the same gas mileage, about 40 miles per gallon.
Even Honda's core models are under pressure. The Civic compact, the No. 6 seller in the U.S. in 2009, is No. 7 this year, researcher Autodata reports, and sales of the CR-V are off by 4.2%. And while Accord sales are growing, Honda opted for more conservative styling when it relaunched the sedan last year. Now potential buyers are exploring other options; a year ago, only 5% of visitors to Edmunds.com interested in the Accord also checked out the Hyundai Sonata, and 6% looked at Ford's Fusion. This March, 12% of Accord shoppers considered the Sonata and 9% gave the Fusion a look.
One such shopper is Charles Summers, who works for a human resources firm near Atlanta. With his first child on the way, Summers figured he would trade his 2007 Hyundai Elantra for an Accord. But he found the styling bland and felt the Sonata was more comfortable. So he spent $26,000 for a Sonata, while a similarly equipped Accord would have cost more than $28,000. "I thought for sure I'd end up with an Accord," Summers says. And that's how market share slips away.
Welch is BusinessWeek's Detroit bureau chief.
04-13-2010, 05:10 PM
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This article shouldn't surprise anyone who spends time here in Car Talk and is a knowledgeable enthusiast.
04-13-2010, 06:31 PM
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Originally Posted by ABCVTEC,Apr 13 2010, 05:22 PM
Maybe this will wake them up. Naaaaaah.
PS I wonder how bad Acura has been doing? On that note, what current Acura or Honda would you even consider buying?
I think the Fit, Accord Coupe, and MDX.
Same question 10 or 15 years ago, I'd say every Honda.
04-13-2010, 07:00 PM
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Originally Posted by QUIKAG,Apr 13 2010, 05:10 PM
This article shouldn't surprise anyone who spends time here in Car Talk and is a knowledgeable enthusiast.
You can tell, quite obviously, that their management is different than years past. And spare me any musings on the economy. How come the other Japanese car mfr's make a few sporty models? Hell, even Hyundai is making some sporty compact cars that stir the soul more than current Honda offerings.
I pay more attention to the motorcycle side and they just came out with a new VFR, finally. They used to bring an all new model every 4 years, the new one took twice that long. The V4 heads were begging for a 1000cc version for a decade. Honda brings out a 1200cc and it weighs 600 lbs. And the price jacked up to sixteen thousand. I could name a few more models they've released over the last 2 years that are epic fail but I don't want to be seen as a Honda hater.
I do enjoy their lawn equipment though. Sadly I'm done with their vehicle offerings After 7 straight Honda/Acuras, and 5 straight Honda bikes (was loyal as shit) it was time to move on to more exciting and innovating vehicles. I'm glad we are seeing this in the press. Maybe one day they'll get lit up enough to do something about it.
They are capable of so damn much. On the motorcycle side they are considered NASA. Capable of so much and nothing but fail
04-13-2010, 07:15 PM
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Beyond the performance variant of the Civic, Honda & Acura make nothing I'd be interested in. Accord is now a barge. Don't need a crossover SUV. Don't need mini van. Don't need a quasi truck. All Acura's are butt ugly.
Nissan / Infiniti has a much broader range of sedans from cheap family transportation to luxury yachts powered by a V8. They have real SUV's and crossovers. They have three sports cars that even have the drive wheels at the proper end of the car. They even have real trucks. No wonder they're outselling Honda.
Nissan / Infiniti has a much broader range of sedans from cheap family transportation to luxury yachts powered by a V8. They have real SUV's and crossovers. They have three sports cars that even have the drive wheels at the proper end of the car. They even have real trucks. No wonder they're outselling Honda.
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04-13-2010, 07:34 PM
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Saw a CRX S parked in the lot outside work today and it made me want to cry. Honda used to be so different. I am not a Honda fanboy, just there isn't anybody who makes cars that simple and enjoyable anymore. Oh well, old news for us who keep track of these things.
04-13-2010, 08:58 PM
#10
I like how they completely ignore FLEET sales in the domestic sales (and Hyundai!) but tout them as "gaining market share". As I've noted in other threads, it is possible that Honda is selling more cars to CONSUMERS than Ford and GM are (individually), based on recent sales trends. That means they're bringing more CONSUMERS into their showrooms as opposed to selling commercial vehicles with virtually no margin on them.
But that wouldn't be jumping on the "Honda sucks!" bandwagon, would it?
Do I think Honda has the best lineup? No! Do I think they suck? No! However, I'd be all over an Odyssey, CR-V, Pilot, MDX, or Civic if I was looking for vehicles in those classes. Doesn't mean I don't think others are good in those classes but I'd have no problem at all picking the Honda or Acura above others in the class.
This article, like so many others, is by someone that's taken a few stats, ignored the story behind them, and made a conclusion that completely defies the true proven performance of Honda in sales, stability, and continual improvement. They're rarely the quickest or most powerful but they are consistently well-built, reliable, fuel-efficient, moderately sporty to drive, and still relatively inexpensive. That's still more than I can say about most lineups today, as a general rule.
It also ignores the fact that smaller sales are easier to improve (as a function of prior sales). 4% of 10,000 sales is 400 cars. 2% of 100,000 sales is 2000 cars. Who had a truly greater sales improvement and got greater market share?
But that wouldn't be jumping on the "Honda sucks!" bandwagon, would it?
Do I think Honda has the best lineup? No! Do I think they suck? No! However, I'd be all over an Odyssey, CR-V, Pilot, MDX, or Civic if I was looking for vehicles in those classes. Doesn't mean I don't think others are good in those classes but I'd have no problem at all picking the Honda or Acura above others in the class.
This article, like so many others, is by someone that's taken a few stats, ignored the story behind them, and made a conclusion that completely defies the true proven performance of Honda in sales, stability, and continual improvement. They're rarely the quickest or most powerful but they are consistently well-built, reliable, fuel-efficient, moderately sporty to drive, and still relatively inexpensive. That's still more than I can say about most lineups today, as a general rule.
It also ignores the fact that smaller sales are easier to improve (as a function of prior sales). 4% of 10,000 sales is 400 cars. 2% of 100,000 sales is 2000 cars. Who had a truly greater sales improvement and got greater market share?