The World Catches up to Honda
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HC Racer H5
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From: KCK
The World Catches up to Honda
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Originally Posted by Fortune
NEW YORK (Fortune) -- For the past decade, Honda has been out of step with most of its North American competitors - sometimes defiantly so.
While other automakers rushed to beef up their pickup trucks and SUVs with stronger frames and bigger motors, Honda stood to one side, refusing to develop either a V-8 engine or a traditional body-on-frame light truck. Likewise, when other manufacturers engaged in a horsepower race to lure consumers and take advantage of cheap gasoline, Honda held back. Staying true to its philosophy of "maximum man, minimum machine" it concentrated on smaller, more efficient four- and six-cylinder engines.
Finally, while other automakers reluctantly explored internal combustion alternatives like gas-electric hybrids and fuel cells, Honda plunged all the way in, launching research efforts into everything from clean diesels to hydrogen power.
Honda's decision to stick with what it believes in is now paying off big time. Look at what happened in July. For its first quarter, Honda reported sales up 15 percent and operating profit up 19 percent. The Honda Accord and Civic ranked as the second and fourth best selling passenger cars in America. In a U.S. market where overall sales fell 17.4 percent, Honda brand vehicles rose 6 percent.
To cap off a remarkable performance, Honda passed Chrysler Group in sales for the first time in history, coming in fourth behind General Motors, Toyota, and Ford).
Unlike richer and more powerful Toyota, which matches American producers car for car and truck for truck, Honda has succeeded by remaining very much a focused Japanese-style company. It maintains a relatively modest product line that it sells in high volume around the globe. Its concessions to American tastes, like the Element SUV and Ridgeline pickup, seem almost like afterthoughts.
Uniquely among the world's automakers, Honda thinks of itself as an engine company first, and still maintains a sizeable business in motorcycles, lawn mowers and marine motors.
As a result, Honda's percentage of light truck sales is the smallest in the industry at 42.7 percent (compared with Chrysler and Ford at around 66 percent). - a good place to be with truck sales falling. And it has the highest corporate average fuel economy and, not coincidentally, the highest median household income for buyers - $87,907. By comparison, GM checks in at $75,888.
The recent spur to Honda's success has been $3 per gallon gasoline, but this has been a case of good planning rather than good luck. With its twin corporate pillars of improving safety and sustainability, Honda has been a consistent striver after ways to limit gasoline consumption, sometimes to its embarrassment.
While it was the first company to market a hybrid-electric car, the lozenge-shaped two-seat Insight it introduced was more test-bed than consumer product and quickly lost the publicity battle to Toyota's more practical Prius. Ironically, subsequent Honda hybrids failed to make much headway either because they looked too much like conventional cars or weren't engineered to provide maximum fuel economy. But Honda has persevered and its Civic hybrid has become a big seller.
Looking ahead, Honda is planning a big worldwide expansion. It plans to boost annual sales to 4.5 million by 2010, up from 3.4 million last year. About a third of that growth will come in North America, where it will build a sixth assembly plant, this one in Indiana. Honda's new factories potentially offer around a 20 percent improvement in productivity compared with existing sites.
Coming on the product front is yet another new hybrid, this one to be smaller and more affordable than the Civic, and three new diesel-powered vehicles.
Honda still likes to do wacky engineering projects that detour it a long way from the car business. The company spent several years developing a sophisticated walking robot called Asimo that it exhibits to school groups. And it just announced plans to enter the market for small business jets by introducing one with space for up to seven passengers.
But given the company's remarkable record of anticipating customer demand, who knows? Both could turn out to be profitable ventures.
While other automakers rushed to beef up their pickup trucks and SUVs with stronger frames and bigger motors, Honda stood to one side, refusing to develop either a V-8 engine or a traditional body-on-frame light truck. Likewise, when other manufacturers engaged in a horsepower race to lure consumers and take advantage of cheap gasoline, Honda held back. Staying true to its philosophy of "maximum man, minimum machine" it concentrated on smaller, more efficient four- and six-cylinder engines.
Finally, while other automakers reluctantly explored internal combustion alternatives like gas-electric hybrids and fuel cells, Honda plunged all the way in, launching research efforts into everything from clean diesels to hydrogen power.
Honda's decision to stick with what it believes in is now paying off big time. Look at what happened in July. For its first quarter, Honda reported sales up 15 percent and operating profit up 19 percent. The Honda Accord and Civic ranked as the second and fourth best selling passenger cars in America. In a U.S. market where overall sales fell 17.4 percent, Honda brand vehicles rose 6 percent.
To cap off a remarkable performance, Honda passed Chrysler Group in sales for the first time in history, coming in fourth behind General Motors, Toyota, and Ford).
Unlike richer and more powerful Toyota, which matches American producers car for car and truck for truck, Honda has succeeded by remaining very much a focused Japanese-style company. It maintains a relatively modest product line that it sells in high volume around the globe. Its concessions to American tastes, like the Element SUV and Ridgeline pickup, seem almost like afterthoughts.
Uniquely among the world's automakers, Honda thinks of itself as an engine company first, and still maintains a sizeable business in motorcycles, lawn mowers and marine motors.
As a result, Honda's percentage of light truck sales is the smallest in the industry at 42.7 percent (compared with Chrysler and Ford at around 66 percent). - a good place to be with truck sales falling. And it has the highest corporate average fuel economy and, not coincidentally, the highest median household income for buyers - $87,907. By comparison, GM checks in at $75,888.
The recent spur to Honda's success has been $3 per gallon gasoline, but this has been a case of good planning rather than good luck. With its twin corporate pillars of improving safety and sustainability, Honda has been a consistent striver after ways to limit gasoline consumption, sometimes to its embarrassment.
While it was the first company to market a hybrid-electric car, the lozenge-shaped two-seat Insight it introduced was more test-bed than consumer product and quickly lost the publicity battle to Toyota's more practical Prius. Ironically, subsequent Honda hybrids failed to make much headway either because they looked too much like conventional cars or weren't engineered to provide maximum fuel economy. But Honda has persevered and its Civic hybrid has become a big seller.
Looking ahead, Honda is planning a big worldwide expansion. It plans to boost annual sales to 4.5 million by 2010, up from 3.4 million last year. About a third of that growth will come in North America, where it will build a sixth assembly plant, this one in Indiana. Honda's new factories potentially offer around a 20 percent improvement in productivity compared with existing sites.
Coming on the product front is yet another new hybrid, this one to be smaller and more affordable than the Civic, and three new diesel-powered vehicles.
Honda still likes to do wacky engineering projects that detour it a long way from the car business. The company spent several years developing a sophisticated walking robot called Asimo that it exhibits to school groups. And it just announced plans to enter the market for small business jets by introducing one with space for up to seven passengers.
But given the company's remarkable record of anticipating customer demand, who knows? Both could turn out to be profitable ventures.
I missed Sean
Joined: Aug 2004
Posts: 11,285
Likes: 1
From: Fairfield/Bridgeport CT
the first diesel we will see here will most likely be found in the TSX and accord as the accord's diesel is overseas is considered one of the quietest and most practical diesel engines ever produced.
:edit:
i expect the diesels to be the same cars running off of the k24 now, those being the element, CR-V and accord under the honda badge and the TSX under acura.
:edit:
i expect the diesels to be the same cars running off of the k24 now, those being the element, CR-V and accord under the honda badge and the TSX under acura.
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Joined: May 2002
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Blah blah blah, right now Honda does not produce a single engine that is anymore power or fuel efficient compared to competition, in fact they are way behind both Nissan and Toyota, while GM and Ford are catching up.
I missed Sean
Joined: Aug 2004
Posts: 11,285
Likes: 1
From: Fairfield/Bridgeport CT
most notably in highway numbers where the accord beats out both the tC and solara. the solara and accord get an equal rating for the city with the tC falling behind.
how about the new hatches:
only the yaris features better fuel economy over the Fit, with the xA, versa and aveo falling short.
besides the versa it also has the most powerful engine.
:edit:
it seems to me that smalll economical cars has ben honda's strong point. just because they havent been in style for over 15 years doesnt change the fact that honda started out as a small scooter and motorcycle company, the heart of the company still lies in smaller cars, and it's the reason the larger engines have been lacking.
Last edited by sherwood; Aug 16, 2006 at 07:58 PM.
Thread Starter
HC Racer H5
Joined: May 2000
Posts: 4,261
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From: KCK
in fact Toyota is not as superior as you worship them to be...take note of the 2m+ recalls as of late (I think Toyota was up to hiding defects and Japan is really cracking down - note that several Toyota offices in Japan were raided)...maybe Ohcdx you shouldn't praise them as god's greatest gift
Last edited by jaje; Aug 16, 2006 at 08:11 PM.
Senior Member
Joined: Jun 2003
Posts: 489
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From: Orlando, Florida
No one makes a stronger, longer lasting and more reliable 4-cylinder engine than Honda, period (IMO) I do too much long distance traveling to take my chances with a less than stellar engine. More powererful 4-bangers from other manufacturers are great, but if I'm stuck on the side of the highway in the middle of the night 1,000+ miles away from home... those extra few horses aren't going to sh!+ for me. I buy Hondas for their utterly reliable engines. Good friend of mine had to have the oil sludged engine rebuilt in his 97 Camry @ just over 100k miles, among various other problems (such as blown struts by 50k miles) So he gets 2-3 more mpg than I do or his car is a little quicker? My 96 Accord gave me 180,000 miles of faithful service and is still going strong for the current owner with well over 200k miles.
Last edited by ItsaHonda; Aug 17, 2006 at 12:35 PM.
