Honda profits drop and Nissan pulls ahead of it in unit sales

Excerpted from today's Wall Street Journal:"TOKYO -- Honda Motor Co. reported a 37% drop in net profit for the fiscal
fourth quarter ended in March due to slumping sales and rising costs in
North America, combined with the detrimental effects of a stronger yen."

"The company was unseated by rival Nissan Motor Co. as Japan's No. 2 car
maker in terms of unit sales. For the fiscal year ended March 31, Honda said
it sold 2.98 million cars globally, while Nissan's sales surpassed the
three-million mark, placing it second after Toyota Motor Corp."

"In North America, a drop in sales of two key Honda products -- the Civic
and the Accord -- caused overall sales for the region to fall 8.2% to
369,000 from 402,000 in the quarter. "
My take: Honda's insular corporate culture and slow reaction time to shifts
in market demands combined with strong work by several of it's competitors
and unheard of levels of consumer quality complaints is already taking it's
toll on sales and operations. Honda's failure to play in the growing rear
wheel drive segments (luxury sedans, pickup trucks, sports and sporting
cars) combined with massive quality problems like the automatic transmission
fiascos is hurting the brand in a big way.

Look at the bold move Nissan has been making over these past several years.
Honda is sitting on the sidelines by comparison.

John

 

nissan made some damn ugly cars. some of em still are. bout the only real
nice one, and i see em all the time is the altima.

the new civics and accords are blander than ever.

 

I don't like the styling of many of the Nissans, but I think the marketing
point is that it is better to have 20% of the population love your design
and 80% hate it then it is to have 90% of people think it is "OK".

Right now Honda is doing bland or bland-to-ugly designs. I own an '03
Accord and had to get past the looks in order to buy the car. The front end
design is especially clumsy. The side view is ok and the rear view isn't
bad, but the front looks like a large oceanic fish which bears it's young
out of it's mouth .. and is due to deliver in a few days.


,
John

 

Actually, I like the look of the new Accord. mostly the headlight. It
gives it an agresive look. Taking into account it's a family sedan that it.
Now the Camry, that's a bland, ugly car. I agree about the looks of the
civic though. I had and loved a 2000 civic sedan but I absolutely late the
new civics. Clumsy interior, terrible bland exterior and they cut every
corner possible.

Sean

 

Indeed, I think that the visible panty lines, er I mean visible cost cutting
which is noticeable on many current model Hondas is a very bad sign.

Cost cutting, like wearing underwear, is fine and neccessary ... but the
world should generally not be able to see it .


John

 

The new Altima's back is so defined and pretty, whereas the Accord's is so
damn round and ugly.

 

The Honda Pilot is so ugly even its mother would hate it. Besides, these
days the fashion among kids is to not wear underwear - gross but true.

 

Is Honda really that much different from any other Japanese company as far
as corporate culture goes? As for the latest Accord it *was* mostly
designed in the U.S. Hmm I wonder where the designers came from?...
G.M.?... Ford?... Chrysler?

Nissan has been firmly taken in hand by Renault since the takeover in '99,
notably by Carlos Ghosn... most of the reason for their spectacular
recovery. I've heard that in the near future, Renault may decide to market
a couple of their models through Nissan dealerships.

Rgds, George Macdonald

"Just because they're paranoid doesn't mean you're not psychotic" - Who, me??

 

Front end design is being taken out of the hands of the mfrs:
http://autoweek.com/search/search_display.mv?port_code=autoweek&cat_code=carnews&content_code=00462702&Search_Type=STD&Search_ID=1952292&record=1
or http://tinyurl.com/ystml.

Honda, with its eco-friendly culture has been moving in that direction for
a while now, i.e. pedestrian friendly, but these new regs for Europe are
going to make a mess of car design. I wonder if anybody in the EU has even
done a cost-benefit analysis on this - it just seems so much like
regulation for regulation's sake... apparently a common theme in the EU
bureaucratic machine. Instead of a few thousand killed, they could end up
with a few thousand maimed para/quadra-plegics.

If you take design parameters for a modern family sedan: pedestrian
friendly front end, high roofline (for in-car video conveniece?), maximum
occupant space, large trunk, high beltline seems to be "in" for some
reason, etc., it doesn't leave much room for playing with external
easthetics.

Rgds, George Macdonald

"Just because they're paranoid doesn't mean you're not psychotic" - Who, me??

 

I have a 1996 I30t, and did not buy a Nissan to replace it. Bought a
2004 Accord instead (although right now it is a 'parade' car and only
comes out on sunny weekends).

Under Renault's management, Nissan has concentrated on lowering their
costs to the point that the Altima, for example, has a
cheap-rental-car look, a no-no for a $27,000 car, and serious
up-and-down pitching in the SE model even on smooth roads. Overall,
they've focussed on bigger engined, premium-gas hungry cars. Mostly
with cheaper 4 speed auto trannies instead of 5 speed. They have
limited suspension expertise or at least limited willingness to use
expensive parts -- most of their high-performance cars sacrifice
smoothness for handling. (The rear-drive chassis G35 and Z being an
exception.)

Their general formula seems to be cheap upholstry, big engines,
simpler transmissions, poor to middlin' ride. Even reliability has
started taking a back seat.

Sure I don't doubt that they'd like to sneak some cheap Renaults into
the Nissan dealer.

JM

 

That's what car building is all about - controlling cost. The formula for
getting it right for quality has a very narrow tolerance - Honda seems to
have missed in some ways with the current Civic and Accord. BTW I've seen
a few comments that the G35, in its market sector, has an unrefined feel
about the engine/trans.

Well in the current political climate it probably wouldn't work but
there's nothing "cheap" about Renaults. They have some impressive cars
like the Laguna in the mid-size sector. If you've ever been to France,
you'll know that the French beat the hell out of their cars and the seem to
take it - the only thing they don't get a lot of is salt on the roads.

Rgds, George Macdonald

"Just because they're paranoid doesn't mean you're not psychotic" - Who, me??

 

IMHO, Honda still does what Honda has always been known for doing extremely
well. Econmical, relaible, high value-cars that are more fun to drive than say
Toyotas.

The proof is in the pudding, which for cars is resale value. Resale value is
still at or very near the top. Just try pricing a 1998 Odyssey.

Where Honda is breaking down is that many of its designs are not 'edgy' enough,
I.E. they are too bland.. Also, the lack of rear-wheel models, especially
pick-ups, large SUVs, etc is bad. Furthermore, the lack of a V-8 limits sales
in the high-end sedan market, as well as, the aforementioned real-wheel drive
vehicles. Finally, other than the S2000 they don't offer any convertibles.

Nissan has done an incredible job with its VQ 3.5 liter V-6. Not only is it a
great engine, but they have figured out a way putting into sedans, sports cars,
trucks, SUVs, minivans, front-drive, rear-drive and four-wheel drive

I have followed the auto industry very closely for about 40 years and I have
never seen an entire company built around one engine.
JIMBO

 

it makes it a lot cheaper to build cars. one thing i dont understand is why
anyone would even consider buying a maxima, when it has the same engine and
platform as the altima.

 

Bought one last October. 50K, nice interior and mechanical, some
paint damage (which didn't matter much to me.) We paid $10,200 US.
Very happy with it except for AT (would much prefer MT) and handling
(would much prefer lower Cg, i.e. car.)

Actually, this has always been a criticism of Accord and Civic.

I don't think that Honda really needs either of those. The Pilot was
the right size and whatever 4wd system they use is satisfactory for
the intended buyer. Really big SUVs and full size PUs share common
architecture and it isn't clear that it is a viable segment for the
Japanese manufacturers. (Toyota is doing OK with the SUVs, but the PU
sales are trivial. Nissan's latest introductions in these areas are
bombing.) I predict that the crossovers will drive the medium-sized
truck-based SUVs off the market. Small pickups are almost extinct
already.

What Honda really needs in the way of rear drive is a replacement for
the RL and maybe a medium priced sporty coup/sedan.

It wouldn't surprise me if Honda brought out a small V8 in the next
few years. OTOH, hybrid technology might be a viable alternative.

 

not from what i see in southern california. tundras are *very* popular.
besides, it took the half-assed T100 for toyota to realize they needed to go
"bigger"

not really.

thats why toyota cant build enough 4-door tacomas to meet demand?

 

I don't have numbers on 2003, but in 2002 Tundra sales were down 9%.

WSJ reported yesterday that Nissan has about 120 days inventory on
Armadas and the new PU. That's pretty poor for brand new vehicles.

In 2002 sales of small pickups declined 12%. Toyota did a little
better than the others. Tacoma sales were down only 6% in 2002.
Meanwhile, crossover SUVs were up 23%.

I may have overstated the extinction part, but it is hard to see why
Honda would want to dive into body-on-frame design to enter a
declining market when they can adapt an existing platform to move into
a hot one.

 

they need to just do what they do best. toyota does cars and trucks well,
but doesnt do motorcycles or scooters. honda does. theyre even slipping in
that market as well.