Weak Dollar is What Hurts Honda With Heavy U.S. sales

[JM]

TOKYO (Reuters) - Hit by dismal domestic sales and a weaker dollar, Honda Motor reported a 17 percent drop in operating profit on Tuesday and forecast a worse than expected year ahead after being overtaken as Japan's second-ranked car maker.

While Honda expects the launch of high-margin cars such as the remodeled Odyssey minivan to spur sales at home this year, analysts said a slowdown in North American sales was a worry since the region accounts for four-fifths of operating profit.

 

[John Horner]

TOKYO (Reuters) - Hit by dismal domestic sales and a weaker dollar, Honda Motor reported a 17 percent drop in operating profit on Tuesday and forecast a worse than expected year ahead after being overtaken as Japan's second-ranked car maker.

Uh, what about the very first phrase "dismal domestic sales" ?

Toyota sells more vehicles in the US than Honda does, but you do not see Toyota making excuses about the weak dollar, eh?

Honda is having some major strategic and execution problems these days.

Praise may make us feel good, but only well founded criticism can help us be stronger.

John

 

[Joseph Oberlander]

Uh, what about the very first phrase "dismal domestic sales" ?

Toyota sells more vehicles in the US than Honda does, but you do not see Toyota making excuses about the weak dollar, eh?

Honda is having some major strategic and execution problems these days.

Two model related ones come to mind:

Nothing to replace the Del Sol. Their only "fun" car is the S2000 which is nigh impossible to locate or afford.

Element. If it was a ture 4wd vehicle, it would sell like crazy. 4*4 and all ruggedized, with a ton of options for under $20K?

My biggest gripe, though, was the interiors. Honda has a problem with multiple personalities. They refuse to make decent interiors and features on their "Honda" line because they don't want to compete with their "Accura" line. Very ticky-tacky interiors lately. That VW can do better shows how much they have slipped.

They also don't sell any true econobox anymore. A Civic is *expensive* lately.

Toyota seems to have a better grasp on the situation.
The Echo is a hot seller. $10K and Toyota quality.
It's small. It's cute. It gets nearly Geo Metro mileage. No hybrid motor or premium fuel or other nonsense. Gets you from A to B for $10K. What's not to like?

The Matrix/Vibe is also a slick car. The Element should have been more like this, IMO, if it wanted to sell, OR should have gone the 4*4 route. The Element *almost* works, but really doesn't. Sales are poor on it as a result, which is a shame as the vehicle is good other than the worthless AWD and too small engine.

Then there's the overlap. The Avalon was a smart move
as well - it's simmilar to a Lexus, but in a more basic trim. They also sell a Corolla sized Lexus with all the goodies and more power. The IS300 is a slick car.

I see very little overlap in the Honda/Accura lines.
This also hurts sales.

Not that Honda couldn't address these problems, but
I see a lot of poor planning lately.

 

[mike (archive)]

Nothing to replace the Del Sol. Their only "fun" car is the S2000 which is nigh impossible to locate or afford.

Si. but its wacky and made in britain.

 

[Dave Garrett]

John Horner wrote:

Two model related ones come to mind:

Nothing to replace the Del Sol.

You misspelled "CRX", but the lack of a suitable replacement for that car's been a problem for more than a dozen years now. ;-)

Their only "fun" car is the S2000
which is nigh impossible to locate or afford.

Afford, yeah. But locate? Depends on where you're at. There's no shortage of them at most of the dealers in my area. I'd love to have one, but my wife needed a 4-door more than I needed an S2000, so we bought an Accord last year and I'm still driving my '91 CRX every day instead.

Dave

 

[Joseph Oberlander]

You misspelled "CRX", but the lack of a suitable replacement for that car's been a problem for more than a dozen years now. ;-)

Lol. I forgot about the CRX. Same problem. Small, fun, inexpensive Hondas sell like hotcakes at IHOP. Nothing really being offered right now. Both the CRX and Del Sol kicked butt, btw. Highly recommended for used cars.

And, no, a re-worked Civic convertable isn't going to cut it

Yes, they make the Si, but it's not like the old hatchback Civics, which were bargain commuter cars. $19K is la-la-land for Civic buyers.

 

[JM]

TOKYO (Reuters) - Hit by dismal domestic sales and a weaker dollar, Honda Motor reported a 17 percent drop in operating profit on Tuesday and forecast a worse than expected year ahead after being overtaken as Japan's second-ranked car maker.

While Honda expects the launch of high-margin cars such as the remodeled Odyssey minivan to spur sales at home this year, analysts said a slowdown in North American sales was a worry since the region accounts for four-fifths of operating profit.

I completely screwed up this posting.

The info I left out:

Dismal domestic sales in JAPAN has hurt overall Honda unit sales figures. This story is from Japan, not here.

80% of Honda's business comes from the U.S.
Because of the weak dollar, "North American sales" (measured in dollars, not cars) has also hurt them a lot. Their unit sales are not hurting in the U.S., only in Japan. But, they aren't making as many Yen since the dollar doesn't buy as many Yen right now.

So, it is b.s. if anyone tells you that Honda sales are down in North America. Actually, they are doing quite well.

If most Accords weren't made here, the weak dollar would have hurt them even more. So, congratulate them on their foresight in building those U.S. plants.

JM

 

[George Macdonald]

I completely screwed up this posting.

The info I left out:

Dismal domestic sales in JAPAN has hurt overall Honda unit sales figures. This story is from Japan, not here.

80% of Honda's business comes from the U.S.
Because of the weak dollar, "North American sales" (measured in dollars, not cars) has also hurt them a lot. Their unit sales are not hurting in the U.S., only in Japan. But, they aren't making as many Yen since the dollar doesn't buy as many Yen right now.

So, it is b.s. if anyone tells you that Honda sales are down in North America. Actually, they are doing quite well.

It was mentioned on Autoline last week (on SpeedChannel), with bar graphs shown, that both G.M. and Ford have surpassed Honda in unit *car* sales in the U.S.<shrug>

Rgds, George Macdonald

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

 

[TeGGeR®]

It was mentioned on Autoline last week (on SpeedChannel), with bar graphs shown, that both G.M. and Ford have surpassed Honda in unit
*car* sales in the U.S.<shrug>

The difference is that GM and Ford are losing money on unit sales. Honda is not.

Honda is currently being hurt by four things:
1) Perceived reliability problems due to auto tranny problems and cheap interiors
2) Obsession with airbags at the expense of overall quality
3) Uninteresting and aging model lineup
4) Failure to match Toyota with new model offerings

Where's Honda's Echo? Where's Honda's Scion tC?

Honda is now even being rejected by the rice-boy crowd. The ricers do have a very bad reputation, but at least are a source of future sales if handled properly. Think Ford, circa 1950.

 

[drifter]

Si. but its wacky and made in britain.

and it looks like a mini-minivan

 

[George Macdonald]

The difference is that GM and Ford are losing money on unit sales. Honda is not.

True *and* even building in Mexico, Ford cannot make a $ on the Focus. Honda is turning less profit though and eventually could go in the red as easily as the other two.

Honda is currently being hurt by four things:
1) Perceived reliability problems due to auto tranny problems and cheap interiors
2) Obsession with airbags at the expense of overall quality
3) Uninteresting and aging model lineup
4) Failure to match Toyota with new model offerings

Where's Honda's Echo? Where's Honda's Scion tC?

I'm not sure that the Echo is making much $$ for Toyota in the U.S. - don't see many - but my, that is one fugly car. I think the tC is going to wipe the RSX off the market; the Civic Si doesn't need competition for that.

Honda is now even being rejected by the rice-boy crowd. The ricers do have a very bad reputation, but at least are a source of future sales if handled properly. Think Ford, circa 1950.

The new Civic is just not a mod-able car any longer. Loaded ground clearance from the factory, which they don't even show in the specs, (4.4" for the RSX) is too low for lowering, the engine is a relic and the car is just boring as hell anyway.

On top of everything else they abandoned CART and now stick their name on some old Ilmor engine for Tony George's feeble IRL. Without that old Ilmor lump, HPD was going to be closed down. At least Toyota's TRD actually did an engine for IRL.

Rgds, George Macdonald

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

 

[Joseph Oberlander]

I'm not sure that the Echo is making much $$ for Toyota in the U.S. - don't see many - but my, that is one fugly car. I think the tC is going to wipe the RSX off the market; the Civic Si doesn't need competition for that.

Actually, it is selling incredibly well as it stomps on most of the other econobox sales. Same price as an Aveo or Accent but it's a Toyota. I see them everywhere here in Los Angeles, especially in the various delivery and courier companies.

 

[George Macdonald]

Actually, it is selling incredibly well as it stomps on most of the other econobox sales. Same price as an Aveo or Accent but it's a Toyota. I see them everywhere here in Los Angeles, especially in the various delivery and courier companies.

Ah OK, a good commuter utility car then.... fugly don't matter.

Rgds, George Macdonald

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

 

[TeGGeR®]

I'm not sure that the Echo is making much $$ for Toyota in the U.S. - don't see many - but my, that is one fugly car. I think the tC is going to wipe the RSX off the market; the Civic Si doesn't need competition for that.

The Echo is selling like hotcakes up here. Whether Toyota is making money or not, the sales are certainly there.

The new Civic is just not a mod-able car any longer. Loaded ground clearance from the factory, which they don't even show in the specs, (4.4" for the RSX) is too low for lowering, the engine is a relic and the car is just boring as hell anyway.

I think that might have been part of the intention. I don't think Honda likes being associated with the "tuners" becuase of their reputation. There is a "tuners" convention up here. A mention of the name "Honda" at this past year's event got hisses and boos from the crowd. Apparently many were upset that Honda had grannyfied the Civic and reduced opportunities for modification.

I'm seeing more new Golfs and Focuses riced-out than Civics.

 

[George Macdonald]

The Echo is selling like hotcakes up here. Whether Toyota is making money or not, the sales are certainly there.

Maybe I'm just not paying attention but around here they're pretty sparse.

I think that might have been part of the intention. I don't think Honda likes being associated with the "tuners" becuase of their reputation. There is a "tuners" convention up here. A mention of the name "Honda" at this past year's event got hisses and boos from the crowd. Apparently many were upset that Honda had grannyfied the Civic and reduced opportunities for modification.

I'm seeing more new Golfs and Focuses riced-out than Civics.

So Honda cut its nose off to spite its face. I think there's a rot at American Honda management - it'll have to be cleaned out before things get better. I'm gonna take a look at the tC when it comes out, though the Camry engine is a bit of a turn off (clunky)... not as bad as it was a few years ago with the cast iron block.

Rgds, George Macdonald

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

 

[ravelation]

The new Civic is just not a mod-able car
any longer. Loaded ground clearance
from the factory, which they don't even
show in the specs, (4.4" for the RSX) is
too low for lowering, the engine is a
relic and the car is just boring as hell
anyway.

So I guess this means that all of the owners of the previous generation are sitting on a supply/demand car. This should keep resale value at a premium.

 

[TeGGeR®]

(ravelation) spake unto the masses in :

So I guess this means that all of the owners of the previous generation are sitting on a supply/demand car. This should keep resale value at a premium.

Or not. It may also be that Honda's time has passed.

Some of the demand that drove up prices was driven by the "cool" factor. The ricers seem to be migrating away from Honda, so I'd think there is a possibility that the "cool" factor is diminishing.

 

[George Macdonald]

So I guess this means that all of the owners of the previous generation are sitting on a supply/demand car. This should keep resale value at a premium.

The RSX still seems to have quite a bit of enthusiasm with the rice crowd - see www.clubrsx.com for the umm, culture, but it's still not amenable to lowering obviously. A browse around there also helps explain the high insurance rates for RSXs, especially the Type S.:-(

Could be late versions of previous models could be in higher demand now... or the ricers are just as likely to move on to something else. Then again maybe some of them will not see the folly in trying to lower a car which is already so close to the road.<shrug>

Rgds, George Macdonald

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