A Tenuous Balance: Honda's Still Bullish on Cars, but Even Segment Leaders Have Weaknesses
While the Ford F-150 will likely still be America’s top-selling vehicle when each of us dies a natural death, the entries below it will surely be subject to change. In the near future, at least, expect to see passenger cars sink further down the best-seller list.
Last year, Honda — a manufacturer with a fairly even car/light truck split — showed up three times on the U.S. Top Ten list: in seventh, eighth, and ninth place, with the compact CR-V leading the way, followed by Civic and Accord. This year’s sales haven’t been as kind to the Accord as it has its segment rival, the Toyota Camry, but at least the Civic’s almost holding its own.
Publicly, Honda remains optimistic about the continuation of cars, claiming they’ll remain its primary focus. Unfortunately, even for models that seemingly can do no wrong, there’s danger signs aplenty.
Speaking to Wards Auto, Ray Mikiciuk, assistant vice president of American Honda’s sales operations, says the brand is “committed” to the passenger car segment. “We believe passenger cars will continue to be a mainstay of our brand,” he said.
Of course, that commitment is predicated on there being buyers in that segment — specifically, buyers who want to drive home in a Honda. There’s no future in chasing ghosts.
Despite his optimism for Honda cars, Mikiciuk says 2018 will be the first year that Honda’s light trucks surpass its cars in terms of volume. Industry-wide, the car/light truck split was 30.5/69.5 percent in July, according to Wards Intelligence data, meaning Honda is an outlier, not the norm.
Touting the Civic’s status as the best-selling vehicle in California, as well as its popularity with certain customer demographics (Hispanic, African-American, and Asian), Mikiciuk dismissed July’s 28.3 percent sales drop as the product of a strong July 2017 sales figure and the fact that, “We just ran out of Civics.” Like GM and practically every other passenger car maker, he views Ford’s wholesale ditching of the segment as a potential opportunity.
Analysts aren’t quite as rosy in their outlooks. Ed Kim, vice president of industry analysis at AutoPacific, praised the new-for-2018 Accord, but said it’s not catching on with buyers. Sales figures bear this out. At the end of July, Accord sales had fallen 14.5 percent, year to date, compared to the Civic’s 4.7 percent dip. Honda’s subcompact Fit saw volume fall 7.2 percent over the first seven months of the year.
In California, the Civic’s best market, buyers continue moving from one side of the aisle to the other, reducing the pool of car buyers. Data from the California New Car Dealers Association shows light-truck registrations rose 5.6 percent in that state during the first half of the year, as passenger car registrations dropped 10.1 percent.
Despite the gathering storm clouds, Honda saw fit to launch a new car model this year — the reborn Insight hybrid — which joins the Clarity range in Honda’s green car push. Hedging its bets, there’s also a new, but not officially announced crossover poised to land smack-dab between the CR-V and Pilot in terms of size and price.
Honda won’t say it, but it no doubt hopes that sales lost to an increasingly car-averse public will hopefully be returned to the brand via the new light-truck entry.
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