Motley Fool article: "Honda Sputters"

[Perian]

Honda Sputters

By Mike Cianciolo
March 3, 2005

Honda (NYSE: HMC) has just suffered through a month it would rather forget. The automaker faced a daunting task in trying to match record-setting sales from a year ago, but its performance was disappointing nonetheless: U.S. sales dropped by more than 7% in February.

Car sales, which account for most of the company's sales, fell an even worse 16.5% from last year. Sales of the two models that compete to be the company's top seller both declined: The Civic reported a 34% drop, and the Accord fell 9.4%. The Civic suffers from an aging design, but Honda is working on a makeover that's due out in 2006 and will likely improve those numbers.

Honda's truck division, meanwhile, fared much better at a 7.5% uptick, even though the sales performance of the CRV and the unusual Element prevented even stronger numbers. The Odyssey led the charge, with gains topping 29%, and the Pilot also did well, with a 12.1% increase.

The company is hoping that its all-new Ridgeline pickup will help keep sales strong in the truck sector, and it's counting on its new designs to pique buyers' interest and get the numbers turned around quickly. Even so, I doubt its ability to compete with the vastly popular F-Series from Ford (NYSE: F). Honda has a strong reputation for reliability and a plethora of loyal buyers, but it's also been called boring -- and rightly so, in my opinion. Honda's "sensible" image could set the company back in an increasingly diverse and competitive marketplace.

Fool contributor Mike Cianciolo welcomes feedback and doesn't own any of the companies in this article.

Source: www.motleyfool.com

[gmsickofan]

but Honda is working on a makeover that's due out in 2006 and will likely improve those numbers.

So are a lot of other companies, and given Honda's last "makeover" I don't expect much.

[AdmiralViscen]

If this was all because of blandness and a 'sensible' image, Toyota wouldn't continue to gain.

[vdoh182]

their problem is tat the honda models dont have abs/vtec or any torque unless u pay near acura rpices for an EX model, my friend almost bought a civic EX the other day, but it was only a few grand less than a new rsx a dealer offered him a good price on. cobalt gas mileage may not be as good as teh civic, but if u were to drive a civic to keep up w/ a cobalt, it would get much worse gas mileage b/c to go anywhere fast u push it to the redline, epa estimates are for cruising and rnt to accurate.

[Smilingoat]

saw my first ridgline today, wow, it reminds me of a previous gen pathfinder for some reason. anyway extreamly bland, looks better in pictures however hard that is to balieve.

[ibechip]

I don't expect the 2006 facelift to really do anything. They should have done more when it was popular. Someone over there must have been imported from GM.

[SVT2888]

Originally Posted by ibechip

I don't expect the 2006 facelift to really do anything. They should have done more when it was popular. Someone over there must have been imported from GM.

Hey maybe they got personel from GM and FORD.

90% of the people that I know that like HONDA and have seen the pictures of the 2006 CIVIC really dont like it.

[460ford]

Its nice to finally see one of the imports take the heat from the media, I also think that most of hondas products are falling behind and outdated. If honda is only doing a facelift on the civic then they are going to have a product that doesnt stack up to well with the competition especially considering the new cobalt which is an excellent product by chevy.

[hudson32]

The Civic is a bit underpowered when you compare it to the Cobalt. I don't necessarily think Honda is falling behind. But they aren't as generous on incentives like most of the rest of the carmakers. By all accounts, the Accord is a stellar performer that wins raves from car and driver and other magazines. But the problem is that they don't have a very diverse array of offerings like Toyota and GM do. And you cannot customize options on Hondas like you can with the other makers. Like on the Buick LaCrosse, you have CX, CXL, and CXS. Even on those trim lines you can load up a CXL where it gets closer to a CXS in feature and trim content, and likewise with a CX. With Honda, if you want a power driver seat, you have to get an LX V6, EX V6 or an EX with leather trim. And sunroofs come with EXs, but not on LXs. So if you like the sunroof, you'll have to get a 6 disc indash changer and several other things that come with the EX package. I like to have the ability to pick and choose, and Honda doesn't give me that flexability. Plus, the Saturn Aura looks like a car that might steal some sales from the Accord. We don't know if it will, but who knows????

[spudglo08]

Down with the ricers.I know i'm biased but i'm American.So i be what ever the fu@k i want.

[awalbert88]

I think Honda has tried to reach into too many new markets too quickly, and has forgotten their roots - small, efficient, reliable passenger cars.

[dav305z]

Originally Posted by awalbert88

I think Honda has tried to reach into too many new markets too quickly, and has forgotten their roots - small, efficient, reliable passenger cars.

Yes I would agree. They got caught in the game of chasing Toyota and left behind what made them Honda. The fact that the Civic, the progenator of the modern sport compact market is now practically an also-ran is pathetic. The Accord is a high quality, relatively powerful sedan, but so is almost every one of its competitors. The G6, for all we critique it here, is more exciting to look at, and soon will have the power to go head to head with Honda's V-6.
What Honda really needs is to focus on making great Hondas, not wannabe trucks.

[idontcareican]

When Honda decided to get rid of its youth image and work against the aftermarket crowd it made a mistake. The Civic is no longer the affordable corner carving car it once was. I experienced the Honda dealership experience with a friend and they want top dollar for everything but the bare bones Civic. They can reach over 20 grand which is ridiculous while the Civic Si does nothing but make a laughingstock of its owner at stop light races. While the Accord needs help on its exterior proportions, the Civic is the one that needs engines and a new body with a return to affordability. Honda may have a reputation for reliability and quality but Toyota takes the crown if you’re interested in that alone. Having owned several Hondas and Toyotas I have judged Toyotas as tougher in every respect as most people do, especially on transmissions, but Hondas used to have the edge in the aftermarket that made it a given for so many buyers. Honda needs to go back to its import roots and be different and youthful again. A lot of tuners have been waiting for the next Civic.

[Action]

From what I have read the Scion division is sub par in terms of reliability. They are well below the industry average.
As for Honda, they need to stop making those wack trucks like the ridgeline and element and get back to what made them great; lightweight, fun to drive pocket rockets like the early 90's Sis.

[johnriley]

All bets are off until we see what they have in mind for the Civic replacement. The cars shown in Chi and Geneva are fine for the adolescents on the internet, but the 4 door sedan is going to tell the story for the company.

I think mostly people in this category (in the US) care about value and reliability. I think the Mazda 3 has a lot more style than either the corolla or civic, but as far as I know it hasn't been doing that great in the US. (I think it is doing great in Canada, but people are more likely to buy a small car as their primary car in canada.)

I don't think a flying door stop, like the Civics we have seen so far, is going to cut it in this category in the US. And Honda may have something quite different in mind.

If they try the flying door stop for the civic sedan, and then bring the practical fit/jazz beneath it, the fit/jazz may kill the civic.