I think it's obvious to even the casual observer that Honda is in a serious slump at the moment. Aside from its woes resulting from the tragic Japan earthquake early this year, its new products have utterly failed to impress critics and its sales in the US market (from which Honda derives much of its revenue) have begun to slip accordingly. The latest in a series of damning reviews comes from Consumer Reports
, which--in spite of the general sentiment on this forum (my own included)--remains an influential publication for car buyers. CR yanked its recommended rating
for the Civic (a long-time CR
favorite), citing among other things its ride, noise, fit and finish, and "miserable absence of character." Their panning of the Civic comes after mediocre ratings for the Insight (which managed something like 1/3 its projected first-year sales
in America), the CR-Z, the new Pilot, and the new Odyssey. CR
saw this problem as so endemic that they went so far as to put out a piece criticizing Honda as a company
for losing sight of its core values and totally neglecting design. I mean when Consumer Reports
of all people calls out your cars for being soulless appliances, something is definitely
wrong. And the sales don't lie. Even the perennially best-selling Civic is slipping; in 2011 the Cruze has outsold it overall and the Focus and Elantra have been nipping at its heels. That is a CRISIS for an automaker that built its reputation and much of its empire on that model. Honda as a whole declined almost 25% in August 2011 relative to the year before. How much of that is earthquake-related and how much is due to the fact that consumers are finally realizing that Honda may be coasting is hard to say. But factor into the analysis of Honda's problems the fact that Acura is a flailing, unfocused, beak-nosed mess and it all adds up to a pretty messy situation for them. How could an automaker once so "relentlessly innovative" fall so hard on its face? Who is making these stylistic decisions? The Japanese were always the quickest to learn from Detroit's mistakes, yet now they appear to be repeating them.
And to make matters even worse, Honda's new US marketing chief responded to CR's criticism
in just about the most oblivious way possible, shrugging off recent criticism as that which an A student might get for bringing home B+ work, while saying that other automakers are being lauded like C students who finally brought home a B-. That, to me, is tacky and horrifically arrogant. Your products should shine in their own right, regardless of how bad competitors' products may have been historically. The point is, now the Koreans and the Americans are producing legitimate (indeed, class-leading) small car challengers, while Honda rests on its laurels. Then--and this is the kicker--he admits that "every time you step up to the plate youíre not going to hit them out of the park." Way to go, new marketing guy, just throw up your hands in defeat and admit that yeah, you're gonna make some cars that just suck. If I were the head of Honda NA I'd fire his ass on the spot.
This all begs another question: is this just Honda's problem, or are other Japanese automakers falling into the same malaise? After all, Toyota has yet to fully recover from its recall fiasco last year, and new numbers show its US sales continuing to fall as well
. Indeed, 7 of 10
brands that lost ground in August were Japanese brands. Nissan and Mazda made the only gains. Meanwhile, Hyundai and Kia are catching up fast, and looking at their products relative to their, say, Honda counterparts, it's really no wonder why. Earlier this summer, in June, the Chevrolet Cruze even briefly dethroned the Camry (!!!) as the best-selling car in the U.S. Who'd have predicted that, three years ago? With tepid reception of the new Camry, and forthcoming salvos from GM (Malibu) and Ford (new Fusion) coupled with strong new competitors from Hyundai/Kia, how long can Toyota keep that top spot? What will the Japanese have to do to regroup and refocus?