A Honda owner who unveiled a souped-up Civic at a tuner event last year got a distinctive reception. The crowd booed.

The Civic is the signature model of American Honda Motor Co. Inc. It was once the most popular car among tuners. But not just the youngest buyers are turning away from the automaker.

A study by J.D. Power and Associates measured owner satisfaction last year with new vehicles' design, content and performance. Honda finished 21st among automakers, down from 15th in 2003.

Loyalty - measured by the percentage of Honda owners who stick with the brand when they buy new vehicles - fell to 55.2 percent last year. The loyalty rate was 57.1 percent in 2003, another Power study found.

The brand ranked below the industry average last year and in 2003 for owner satisfaction with the new-vehicle purchase experience at its dealerships.

The median age of Honda owners rose to 45 in 2004 from 43 a year earlier, according to the Strategic Vision auto consulting firm in Tustin, Calif.

Once known for engineering excellence, Honda faces strong competition from Nissan North America Inc. and Mazda North American Operations.

"Honda has to fight on more fronts than before," says Doug Scott, a vice president of the NOP World Automotive consulting firm in Southfield, Mich.

Critics assail what they call Honda's overly conservative styling and marketing. The automaker has "definitely lost its mojo," says Todd Turner, president of the CarConcepts consulting firm in Thousand Oaks, Calif.

John Mendel, Honda's new senior vice president of operations, identifies his priority as "making Honda cool again."

Mendel joined Honda last year from Mazda. He oversees product planning, advertising, marketing, distribution and public relations for both Honda Division and the Acura Division.

Some Honda executives insist the company is not struggling. They note the brand recorded its ninth straight year of higher annual U.S. sales in 2004. But only an aggressive sales event in December allowed Honda Division to eke out a 1.4 percent gain in annual sales, to 1.19 million vehicles. Honda Division's U.S. sales in the first two months of 2005 were 10.6 percent lower than in the year-ago period.

Honda's progress will depend heavily on whether it can attract and keep young buyers. It struck out with its boxy Element SUV, which it introduced in 2002 and aimed at men under 25, analysts say.

"The demographic for the Element didn't hit what it was supposed to," says Ron Theis, a Honda dealer in Corvallis, Ore. "For us, it's more popular with 40-to-60-year-olds."

Tuners shun the current-generation Civic because its suspension makes it harder for them to customize the car. Mendel concedes Honda "lost that kind of emotional click" with the car. But he vows to recapture it with the next-generation Civic that is coming this fall.

Tuners, Mendel adds, should be "quite pleased" with the two-door Civic Si. He says the Si "promises to be the fastest, most powerful and fun-to-drive" version of the Civic since the Si model debuted in 1986. Civic buyers now are in their late 30s or early 40s, says Art Spinella, president of CNW Marketing/Research Inc. in Bandon, Ore. Years ago the buyers tended to be in their late 20s or early 30s, Spinella says, but Honda products have gotten "really expensive."

In February, Honda increased prices by an average of $150 for its 2005 models except the Element, Civic LX SE coupe and Insight hybrid coupe. The automaker cited higher operating costs, rising steel prices and currency exchange rate factors.

Honda has been reluctant to offer discounts on its vehicles. In January, Honda's average incentive was $551 per vehicle, compared with the industry average of $2,412, according to the automotive Web site Edmunds.com.

Observers of the company say Mendel needs to cut loose with Honda's marketing.

"We have always probably been a little too humble," says Eric Conn, Honda's assistant vice president of auto advertising. "We're not really screamers. We need to crank it up a little."

Analyst Turner says Honda's decades of success created complacency. He adds: "Honda feels that it doesn't need to sell itself."

http://www.autoweek.com/news.cms?newsId=102128

 

This is interesting. The general feel amongst my friends and family is that although improving as a whole, Chevy, Ford, GM, Dodge, VW, Mercedes, Audi, etc still SUCKS in quality compared to what you can get in a Japanese brand.

Honda/Toyota used to be a night and day difference compared to other brands and I admit the gap seems to be shrinking. But it's NOT negligible yet. With reliability top on my list, I'll buy a Honda, Toyota, Mazda, Subaru. I'm hesitant to buy a Nissan, Mitsubishi, Hyundai, or a BMW. The rest, I say it's not worth the risk. I avoid Saturn, Chevy, VW, and Mercedes like the plague.

Another problem with Honda: they are being too conservative to jump on the sport wagon and the fast-back looking hatchback (think Mazda6 hatch or Scion tC) trend.

 

You'd buy a Mazda over a Nissan because of reliability? I would think it's the other way around.

Like the articles say, Honda seems to get a little too used to have the car selling itself. But competition has heat up alot and Honda hasn't really responded. Nissan/Toyota keep on releasing new products. Chrysler release new product and improve its quality. While Honda hasn't really release any new product since the Element.

 

honda responds to market demands in the slowest way possible. this is true in japan, as well, but i don't know how well they're doing in europe. their marketing is also stagnant. hopefully they can get their act together. the next civic seems like a step in the right direction, but unfortunately it's only one step, instead of a big leap forward. i'm also not sure it'll be a winner in terms of styling

 

Hmmm... I need to qualify this.

I'd buy a Mazda3 because it's manufactured in Japan. But the Mazda6 I'm more skeptical because it's not.

According to my relative who lives in Japan, the society basically expects "perfect quality" from manufacturers (including auto manuf.). Mitsubishi recently has had a bad rap in Japan for "covering up a problem" (because they didn't want to tarnish the image). Reality is (whether or not the Japanese accept it) is that problems will happen.

Whereas in the US, the society expects that if the product is defective, that the company take responsibility for fixing it.

So combine the high standards of Japanese with the "take responsibility for your products problems" of the US, it would seem that Japanese cars are a good bet for car owners.

 

Honda needs to offer more "content" for its dollar. Although the Accord compares favorably against the Camry/Altima, the Civic fights in a very crowded segment against the Jetta, Mazda3, Impreza, just to name a few.

 

I think that's utter crap. Any nation is capable of building a well built, reliable, quality car. How Subaru, Hyundai, Cadillac, Buick, and Porsche have been climbing the quality ladder and in more than a few cases beating the Japanese Big 3 is proof of this. That Mazda, Isuzu, Mitsubishi, Suzuki and other Japanese automakers so completely fail to live up to your statement above is another reason it's not true.

Toyota, Honda, and Nissan (Nissan less so recently) have defined their purpose as high quality, meticulously assembled cars. That was their rason d'être. Now as other automakers focus more they're catching up, and in some cases beating the Japanese 3. Moreover, as the Japanese realize this, they're trying to focus on style, power, putting emotion back into the car, leading to quality stagnation and gaffes. (the most recent example - the shoddy interior quality of the new Toyota Avalon)

Buying Japanese for Japanese quality? Acura regularly loses to Honda in quality surveys, despite a larger percentage of Acura cars being built in Japan. Sure, as a luxury marque, people expect more. But clearly there's not a significant quality jump from being Japanese built to offset the higher expectations. People often cite Lexus' being exclusively built in Japan - which in the past was true. But Toyota also mandated an even greater level of quality control with Lexus than with Toyota cars - one would argue that it was the process, not the workers, that made the biggest difference there. And Toyota is clearly confident enough with their US workforce because they're going to start building Lexuses in the US soon (if they haven't already started).

Now, I'm not saying your relative in Japan is wrong, but there are flaws in his argument and sweeping overgeneralizations like that about Japanese and US society are just asking to be picked apart.

And I'll add that I am aware Subaru is a Japanese brand. But for a brand that used to be down the Japanese automotive quality craphole, it's really stepped up.

 

It doesn't look like you understood my original statement. I said the SOCIETY demands the perception of "perfect quality". Japanese have a lot of pride in their own stuff, so quality is one of the things they focus on. I did NOT say that the Japanese are the ONLY ones capable of quality.

I can't speak about the others, but Mitsubishi is in big trouble in the eyes of the Japanese in Japan.

 

It's still a very broad generalization to describe Japanese society, one that is impossible to prove. I don't think anyone thought you meant Japanese automakers were the only ones capable of quality, but that Japanese society demands quality moreso than other societies, which I argue is false, given the number of lackluster, lesser quality automotive brands out of Japan, even ones other than scandal-ridden Mitsubishi like Mazda or Isuzu or Suzuki - which last I checked do fairly well in Japan.

 

I think the problem is that Hondas are getting too pricey. Never before did a fully loaded Accord cost 30,000 bucks. Sure, never before did accord have 240 hp, navi, leather, 300w stereo, etc, but the fact is that it is still an Accord, and in 30K price range there are wayyyy too many sweet cars to chose from. Not necessary are they better than Accord, but they are there.

From my own perspective, I was considering a bran new Accord as a replacement for my wife's aging 94 GS300, but she would only settle for Accord if it was to have V6, leather, heated seats, etc... Which turned out to be around 29K! So I said no way, and we are going to be putting the money towards a moderately used LS430 or GS430. Now, if the Accord was around 24-25K, that would be a different story.

If anything, Honda should bring down the price of accord to 26K max, fully loaded, and perhaps introduce a new model, say "Honda Melody", and make it a bit more upscale, sort of like the Avalon.

As far as the Civic is concerned, I think they should give keep it conservative as it is, but give it a more powerful engine, while not increasing the price. However, they should bring over Honda Fit, and perhaps give it good old B16a and double wishbone suspension like previous civic had, which would make all the enthusiasts happy again.