Honda To Become Greater And Smaller
Carmakers around the world are falling into each others arms faster than after a speed-dating session. Some are more promiscuous than an avowed wife swapper. What is Honda, the #2 in Japan, up to? Especially after seeing a 35 percent drop in October, and that may just be the beginning of it. Are they looking for some corporate nookie? Or will they remain celibate? The Nikkei [sub] had an interview with Honda CEO Takanobu Ito. Here are his most salient points, without any comments.
- “During the 10 or so years (until the collapse of General Motors), the automobile industry was in a sort of bubble. In that period, carmakers could enjoy sales growth even if they only kept doing the same old things unthinkingly.”
- “Now, the business environment is completely different. Consumers have started refusing to buy products unless they clearly and definitely need them.”
- “I don’t deny the benefits of a good partnership. But we believe what we should value the most is not our partners but our customers. Imagine two carmakers agreeing on mutual access to their dealer networks in a tie-up aimed at expanding their sales. Would their dealers really make serious efforts to sell cars of the other maker for which they feel no affection?”
- “Honda will have no future as a large company. We will aim to become a “great smaller” company. ”
- “Exchange rates are determined by the market moment by moment, and there is no point in our telling how much yen a dollar should be worth. What is important is how to manage currency risks. Honda has factories around the world, and they can supply vehicles to each other (to offset the effects of currency fluctuations).”
- “If the yen remains strong, we should be able to take advantage of a strong yen by importing cars from our overseas plants.”
- “Japan needs to have free trade agreements with its major trade partners. This is the direction Japan should go. A policy response to the yen’s strength is necessary, but what we want to see more than anything else is free trade agreements.”
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
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Honda seems to have completely lost the plot. They left certain products to rot on the vine like the S2000, NSX, Element and Pilot in a manner which would make the Old Ford proud. Meanwhile, the product Honda has redesigned often turn out to be a step backwards. Meanwhile, they have put a face on Acura only a bling deprived teenager might find attractive on a luxury vehicle. Honda was once a hybrid leader, but now is a flailing also-ran. Meanwhile, they are spending money trying to build a small jet airplane (the Honda Jet).
Sad, so sad.
I just bought a 2010 Accord LX with 5 speed manual after a steady diet of mostly European cars over the years. I am no Honda fanboy, but overall the Accord is a pretty impressive car. It does have its paradoxes however. After living with it for the past 7 months, the Accord is a high quality piece, much more so than the Malibu, Fusion and Camry that I compared it to. But consider: it has a headliner material fit for a Bentley, but the floormats are the cheapest ones I have ever encountered. In 5600 miles of daily commuting, they have worn through to the backing already (and I'm not wearing hockey skates to work either). The car has a reassuring stoutness to all of its components and exceptional interior quality, but the front left fender is misaligned, causing an uneven gap between it and the hood. Interior plastics are high quality, but the seat material on the sides of the seats is that disturbing "mouse fur" stuff that seems out of place, even in the LX. These and other content specific curiosities (the hefty damped lid for the center cupholders belongs in MOMA - but no lining for the trunk lid?) One thing is for sure - the Accord is fun to drive (relatively speaking of course), especially with a manual. Every time I hear "the Accord is bloated!!", i have to laugh, because at 3200 pounds, not only is it just 50 pounds heavier than its predecessor, it's the lightest car in its class. Double-wishbone front suspension, multi-link rear, 7,000 rpm on an engine that is happy to go there all day, seats that would be "sport seats" in another car, small diameter steering wheel, terrific steering feel - it's all there in that dull wrapper. Overall, I'm pleased with the car, and I'm sure it will be dead reliable and durable as it has been so far. It's fun-to-drive quotient is satisfying for a commuter. But, the missteps, while not earth shattering, are surprising for a Honda. Not quite up to the standard I was expecting. It will be interesting to see in what direction the company goes.