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Toronto Star
July 10, 2004
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A few years ago, it looked like nothing could stop Honda Canada. Fuelled by a strong reputation for vehicle quality and reliability in the marketplace, Honda had earned its status as a major player. Sales for the Japanese-based auto giant had grown significantly over a generation. Market share had climbed steadily. The company made some hot models. Its two assembly plants in Alliston, north of Toronto, boomed. Honda had even shot ahead of arch-rival Toyota in sales during 2002 after three record years.
But while its assembly plants have continued humming, Honda sputtered in Canada during 2003 and again in the first six months of this year. In contrast, Toyota has shifted into overdrive after a sales dip in 2000. It overtook Honda again in 2003 and has widened the gap this year.
Industry watchers and company officials attribute Honda's downturn here to two reasons - aging product and a lack of aggressiveness in the marketplace.
Other industry insiders add that Honda's bureaucracy in Japan and elsewhere has stymied decision-making that would help the company avoid trouble and enjoy better success in the marketplace. Sales of Honda and its luxury car division, Acura, in Canada reached a peak of 165,331 in 2002 but slid 6.4 per cent last year to 154,630. That mirrors the decline in the over-all market. In the first half of this year, Honda's sales dropped another 13 per cent to 77,771 from the corresponding 2003 period. That's worse than the market, which was down 3.9 per cent.
In contrast, Honda continues to perform well in the United States. Sales outpaced the market, jumping 8.1 per cent in 2003 and another 2.5 per cent in the first half of this year on continuing strong demand for Accord cars, Odyssey minivans and Pilot sport utility vehicles.
In Canada, Chris Travell, vice-president of the auto research group at Maritz Research, says Honda has become vulnerable because of a shortage of steady new model designs to attract motorists who generally drive different vehicles than Americans. For example, the intermediate Accord cars attracts a significant portion of the driving public south of the border but less so here. In Canada, motorists buy more small cars than Americans and that's where the competition is fierce.
"Honda is struggling here with a few aging products," Travell said. "But to their credit, they are reconfiguring their existing lineup to make it more appealing to Canadians." Honda spokesperson Jim Miller agreed new redesigned competing models have cut into Canadian sales of the company's flagship vehicle, the Civic compact. "What is selling in the marketplace is new," Miller said bluntly.
The Toyota Corolla and Echo, the Mazda 3, Pontiac Sunfire and a series of small cars from shave gained a significant share of the popular subcompact and compact segments. GM is increasing the competition by introducing the Chevrolet Cobalt to replace the long-running Cavalier this fall.
Honda has not redesigned the Civic compact since 2000. Consumers won't see dramatic changes until the fall of 2005. The Civic is still the country's best-selling car, but its popularity has declined in the last few years. In the first half of this year, sales slid 15.3 per cent. Travell said competing models are stylish, economical and priced low. Other Honda models have also lost some sales zip in the first half of this year. Business for the Accord plunged 19.2 per cent; the CR-V sport utility vehicle slid 17.5 per cent; the Odyssey minivan fell 11.6 per cent and the Acura MDX luxury sport utility is off 7.6 per cent.
But Miller, Honda's senior vice-president of corporate affairs, said most other competing models have declined along with the Accord in the slumping intermediate segment. The CR-V remains Number 2 in the compact sport utility category and the Acura MDX is still Number 3 in its segment, he noted.
Miller added that the Odyssey's popularity has waned because it is not as competitive in price with the segment's other big sellers, the Dodge Caravan, Pontiac Montana and Chevrolet Venture. But Miller said Honda has become more aggressive in incentives on the Civic and other models in recent months. "You're certainly going to see more of that," he said.
Miller acknowledged that Honda Canada became "complacent" in its marketing and incentives in recent years while competitors flooded the market with no-interest financing, cashbacks and free options.
Full Story Here
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July 10, 2004
A few years ago, it looked like nothing could stop Honda Canada. Fuelled by a strong reputation for vehicle quality and reliability in the marketplace, Honda had earned its status as a major player. Sales for the Japanese-based auto giant had grown significantly over a generation. Market share had climbed steadily. The company made some hot models. Its two assembly plants in Alliston, north of Toronto, boomed. Honda had even shot ahead of arch-rival Toyota in sales during 2002 after three record years.
But while its assembly plants have continued humming, Honda sputtered in Canada during 2003 and again in the first six months of this year. In contrast, Toyota has shifted into overdrive after a sales dip in 2000. It overtook Honda again in 2003 and has widened the gap this year.
Industry watchers and company officials attribute Honda's downturn here to two reasons - aging product and a lack of aggressiveness in the marketplace.
Other industry insiders add that Honda's bureaucracy in Japan and elsewhere has stymied decision-making that would help the company avoid trouble and enjoy better success in the marketplace. Sales of Honda and its luxury car division, Acura, in Canada reached a peak of 165,331 in 2002 but slid 6.4 per cent last year to 154,630. That mirrors the decline in the over-all market. In the first half of this year, Honda's sales dropped another 13 per cent to 77,771 from the corresponding 2003 period. That's worse than the market, which was down 3.9 per cent.
In contrast, Honda continues to perform well in the United States. Sales outpaced the market, jumping 8.1 per cent in 2003 and another 2.5 per cent in the first half of this year on continuing strong demand for Accord cars, Odyssey minivans and Pilot sport utility vehicles.
In Canada, Chris Travell, vice-president of the auto research group at Maritz Research, says Honda has become vulnerable because of a shortage of steady new model designs to attract motorists who generally drive different vehicles than Americans. For example, the intermediate Accord cars attracts a significant portion of the driving public south of the border but less so here. In Canada, motorists buy more small cars than Americans and that's where the competition is fierce.
"Honda is struggling here with a few aging products," Travell said. "But to their credit, they are reconfiguring their existing lineup to make it more appealing to Canadians." Honda spokesperson Jim Miller agreed new redesigned competing models have cut into Canadian sales of the company's flagship vehicle, the Civic compact. "What is selling in the marketplace is new," Miller said bluntly.
The Toyota Corolla and Echo, the Mazda 3, Pontiac Sunfire and a series of small cars from shave gained a significant share of the popular subcompact and compact segments. GM is increasing the competition by introducing the Chevrolet Cobalt to replace the long-running Cavalier this fall.
Honda has not redesigned the Civic compact since 2000. Consumers won't see dramatic changes until the fall of 2005. The Civic is still the country's best-selling car, but its popularity has declined in the last few years. In the first half of this year, sales slid 15.3 per cent. Travell said competing models are stylish, economical and priced low. Other Honda models have also lost some sales zip in the first half of this year. Business for the Accord plunged 19.2 per cent; the CR-V sport utility vehicle slid 17.5 per cent; the Odyssey minivan fell 11.6 per cent and the Acura MDX luxury sport utility is off 7.6 per cent.
But Miller, Honda's senior vice-president of corporate affairs, said most other competing models have declined along with the Accord in the slumping intermediate segment. The CR-V remains Number 2 in the compact sport utility category and the Acura MDX is still Number 3 in its segment, he noted.
Miller added that the Odyssey's popularity has waned because it is not as competitive in price with the segment's other big sellers, the Dodge Caravan, Pontiac Montana and Chevrolet Venture. But Miller said Honda has become more aggressive in incentives on the Civic and other models in recent months. "You're certainly going to see more of that," he said.
Miller acknowledged that Honda Canada became "complacent" in its marketing and incentives in recent years while competitors flooded the market with no-interest financing, cashbacks and free options.
Full Story Here
