Honda feels squeezed by Koreans, Detroit 3
05-03-10, 08:59 AM
#1
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Honda feels squeezed by Koreans, Detroit 3
http://www.autonews.com/apps/pbcs.dl...IL02/305039972
Honda feels squeezed by Koreans, Detroit 3
Hans Greimel
Automotive News -- May 3, 2010 - 12:01 am ET
Honda's Koichi Kondo says the automaker has to "develop better product so as not to lose."
TOKYO -- Honda Motor Co., fresh off a 92 percent jump in annual operating profit, says it is feeling the pinch from Hyundai and Kia on one side and a more competitive Detroit 3 on the other.
Executive Vice President Koichi Kondo says inexpensive Korean brands are appearing increasingly on Honda's cross-shopping lists. At the same time, Honda's U.S. rivals are refocusing on small and mid-sized sedans after the slump in light-truck sales.
"Since the Lehman Brothers shock, the Big 3 have been re-emphasizing passenger cars like the Civic and Accord," Kondo said while announcing the Japanese automaker's earnings for the fiscal year that ended March 31. "Competition in that segment is really increasing."
He added: "We will have to develop better product so as not to lose."
Despite the increased rivalry, Kondo said he expects Honda's per-car incentives to remain mostly flat compared with last year. But overall spending probably will rise with higher volume.
Honda forecasts North American sales to climb 14 percent to about 1.5 million vehicles in the current fiscal year, ending March 31, 2011, from 1.3 million in the year that just ended.
So far this year, Honda has failed to capitalize on Toyota's lost U.S. market share. American Honda's share fell to 10.1 percent in the first quarter from 10.5 percent a year earlier.
While Honda-Acura lost ground, Ford Motor Co., General Motors Co. and Nissan North America took a piece of Toyota's 1.2 percentage points in lost share. Volkswagen Group gained 0.5 points.
Last month Honda launched an incentive program that lets customers lease the Accord, Civic and Insight cars and the CR-V, Pilot, Element, Odyssey and Ridgeline light trucks with no down payment or security deposit and no money due for a month. But the company has not resorted to the cut-rate financing or cash rebates rolled out by Toyota, Ford and GM.
Meanwhile, U.S. inventories have returned to normal levels, Kondo said.
Honda had a 74-day supply of Civics on April 1, down from 96 days a month earlier. It had a 65-day supply of Accords, down from 78 days on March 1.
Honda reported a 92 percent increase in operating profit to ¥363.7 billion ($3.92 billion) in the year that ended March 31. Net income rose 96 percent to $2.90 billion.
Read more: http://www.autonews.com/apps/pbcs.dl...#ixzz0msmkPPdv
Hans Greimel
Automotive News -- May 3, 2010 - 12:01 am ET
Honda's Koichi Kondo says the automaker has to "develop better product so as not to lose."
TOKYO -- Honda Motor Co., fresh off a 92 percent jump in annual operating profit, says it is feeling the pinch from Hyundai and Kia on one side and a more competitive Detroit 3 on the other.
Executive Vice President Koichi Kondo says inexpensive Korean brands are appearing increasingly on Honda's cross-shopping lists. At the same time, Honda's U.S. rivals are refocusing on small and mid-sized sedans after the slump in light-truck sales.
"Since the Lehman Brothers shock, the Big 3 have been re-emphasizing passenger cars like the Civic and Accord," Kondo said while announcing the Japanese automaker's earnings for the fiscal year that ended March 31. "Competition in that segment is really increasing."
He added: "We will have to develop better product so as not to lose."
Despite the increased rivalry, Kondo said he expects Honda's per-car incentives to remain mostly flat compared with last year. But overall spending probably will rise with higher volume.
Honda forecasts North American sales to climb 14 percent to about 1.5 million vehicles in the current fiscal year, ending March 31, 2011, from 1.3 million in the year that just ended.
So far this year, Honda has failed to capitalize on Toyota's lost U.S. market share. American Honda's share fell to 10.1 percent in the first quarter from 10.5 percent a year earlier.
While Honda-Acura lost ground, Ford Motor Co., General Motors Co. and Nissan North America took a piece of Toyota's 1.2 percentage points in lost share. Volkswagen Group gained 0.5 points.
Last month Honda launched an incentive program that lets customers lease the Accord, Civic and Insight cars and the CR-V, Pilot, Element, Odyssey and Ridgeline light trucks with no down payment or security deposit and no money due for a month. But the company has not resorted to the cut-rate financing or cash rebates rolled out by Toyota, Ford and GM.
Meanwhile, U.S. inventories have returned to normal levels, Kondo said.
Honda had a 74-day supply of Civics on April 1, down from 96 days a month earlier. It had a 65-day supply of Accords, down from 78 days on March 1.
Honda reported a 92 percent increase in operating profit to ¥363.7 billion ($3.92 billion) in the year that ended March 31. Net income rose 96 percent to $2.90 billion.
Read more: http://www.autonews.com/apps/pbcs.dl...#ixzz0msmkPPdv
05-03-10, 09:03 AM
#2
Lexus Fanatic
Like I have been saying...... the Japanese better watch their backs. The koreans are rising faster than the Japanese did back in the day. Its probably because of the reputation that the Japanese have created that maybe gives consumers confidence to try a Korean car
05-03-10, 09:27 AM
#3
Lexus Fanatic
But the company has not resorted to the cut-rate financing or cash rebates rolled out by Toyota, Ford and GM.
The company stands to lose even some more ground when the Ford Fiesta and the new Ford Focus debut by the end of the year. They will give the Fit and Civic even more competition than they have now.
The current Civic, BTW, is overdue for a major redesign (by Honda standards). Honda used to have a 4-year update/redesign cycle for all of its vehicles. For whatever reason (perhaps economic), that now seems to be on hold.
05-03-10, 09:34 AM
#4
Lexus Fanatic
I am for anything that will help the consumers get a great deal on a great car. I think the economic environment is perfect for car buyers right now. I am still excited to go in and beat the crap out of the dealership when we finally buy my wife that SUV
05-03-10, 09:39 AM
#5
Lexus Fanatic
Did you or your wife consider shopping last year, during the Cash-For-Clunkers program? As far as great deals go, that would have been the ideal time to shop, if your old vehicle qualified....having the government kick in $3500-4500 over and above the dealer/manufacturer incentives.
05-03-10, 12:08 PM
#7
This is a good thing. At least somebody at Honda recognizes they are behind the ball. Hopefully this really does transfer into better styled and better performing cars. Maybe within 10 years Honda will start putting out cars like they did in the 90's, of course with 2020 technology 
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05-03-10, 02:34 PM
#9
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Nice to see that they realize it, but once again they are simply pointing out the obvious.
This is simply more talk from Honda. So far they have not shown the product to back up their talk.
This is simply more talk from Honda. So far they have not shown the product to back up their talk.
05-04-10, 12:13 PM
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Well what Honda has going for them that offsets the pressure somewhat is their loyal, and I would say somewhat blind, customer base. People are still buying Honda's with inferior/older engine technologies and a more than decade old 5-speed auto. A couple thousand people every month still pick the Insight over the Prius for who knows what reason.
05-04-10, 12:21 PM
#11
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Well what Honda has going for them that offsets the pressure somewhat is their loyal, and I would say somewhat blind, customer base. People are still buying Honda's with inferior/older engine technologies and a more than decade old 5-speed auto. A couple thousand people every month still pick the Insight over the Prius for who knows what reason.
Sounds like they realize depending on the loyal and somewhat blind customer base is not how to stay near the top.
05-04-10, 03:49 PM
#12
Lexus Fanatic
I'll tell you why. Though it's true that the Prius has a more refined/more efficient drivetrain, a less-cramped rear seat, and a better paint job, and, of course, great resale value, the Insight has a somewhat lower price than base Prius models, markedly better steering/handling, less-geeky controls/gauges, and (IMO) significantly better/more durable interior materials. Both cars, of course, use a lot of interior plastic, but that used in the new 3Gen Prius (and the Prius sheet metal) seems to have dropped in quality over that used in the 2Gen model.
05-04-10, 09:46 PM
#14
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Hyundai's recent design trend is one of the biggest noise maker in the market.
Honda too make huge noise in terms of their design just not positively like hyundai.
think of these 2 brands just 7-8 years ago. no wonder Honda is p!ssed at hyundai.
Honda too make huge noise in terms of their design just not positively like hyundai.
think of these 2 brands just 7-8 years ago. no wonder Honda is p!ssed at hyundai.
05-05-10, 08:26 AM
#15
Lexus Fanatic