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Has Honda's run - run out?
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If the use of incentives is linked closely to corporate profitability, then why are the highest incentives coming from GM, Ford, and Chrysler?
You keep trying to use the Harbour Report as evidence to confirm profitability, but I get the feeling you don't really understand the limitations of the report. Go to their website and take a closer look. Just for example, here's a quote from the section on assembly.
"Only the companies that fully participated with all of their North American plants were included in the company rankings (plant rankings continued to include all participating plants). Nissan was not included in the company rankings because its operations in Mexico and Canton, Miss., did not participate in the report measures. Honda and Toyota also were not included in the rankings. Honda's Alliston #1, Alabama, and Mexico plants did not participate in this year's report, nor did Toyota's assembly plants in Princeton, Ind., and Cambridge, Ont., South."
Finally, keep in mind that the profitability of the products produced at the participating plants is based on the markets where they are sold. Not all cars produced in North America are sold in the USA. Yet, you're using the data to support a conclusion about incentives in the US market.
Are we concerned that the tranny might go after the 100,000 mile extended warranty Acura has issued? Sure.
Would we have the same concerns about a Ford or Chrysler with more than 100,000 miles on it? You betcha.
But seriously, one of my neighbors is in carpet sales and he gets fleet vans, Grand Caravans, and van after van doesn't give him more than 80k on a tranny.
-juice
I still have a '92 Integra that has 130K miles and is going strong.
My brother in law has a '93 Accord with over 200K miles.
I don't get that same feeling with my TL. I have more confidence that my old '92 Integra will go to 200K and beyond than I do in my 2002 TL that has around 35K right now. Like I said, it's disappointing. I bought the TL expecting it would last as well as my older Honda/Acuras, but having the trans fail at 30K doesn't give me a warm fuzzy feeling about it.
Plus it was pre-ODB2, so you didn't see all the check-engine lights you hear about today. Cars were lighter and that put less strain on the powertrain. Not to mention you weren't competing for road space with 3-4 ton monsters.
The TL is heavier and pulls that weight quicker, all while having to meet tighter emissions standards. Those levels of power and weight were things Honda just didn't have much experience with. The original Legend had 170hp IIRC, and probably polluted 10 times as much as the TL.
It's hard to match cars from that era because of all the new requirements placed on the new ones.
-juice
That's why I emphasize there are two TOTALLY different ways to use incentives. The Detroit way is borne out of desperation. Nissan and Toyota are hardly desperate. By all measures they're the two most profitable automakers in the world. They use incentives to capture market share, because they're the most efficient and profitable.
Of course Harbour reports have limitations, but globally we know Honda is not as profitable as its two rivals. And Honda is markedly absent from the most efficient plants as ranked by Harbour.
I'm just saying there's a very good reason why Honda is not willing to match Nissan/Toyota's incentives: because Honda's profitability isn't on par with the other two. You think Honda's willing to concede growth and market share because it doesn't like incentives in principle. No, I don't think so. This has everything to do with money and profits, nothing to do with philosophy and principles.
Park a new TL next to an old one. What strikes me is that - how much smaller the windows are now.
-juice
Honda America is only down .4% from best selling year ever totals. They are doing fine.
-juice
B. The use of incentives is bad because it's better to to make more money per unit than sell more units.
Rather than philosophies, let's call these "profit strategies". As Mariner correctly stated, it's all about profits. So, which one is correct?
The larger problem is, unless your model has tangible advantages over its peers that you can point to and people will pay extra for, the only way to spur sales of a lagging model is to either redesign it early (a slow process with a lot of lag time) or put on some incentives (an instantaneous process with only the lag time necessary to throw some ads together to promote it).
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
Not a bad-looking car, and won that will definitely put the Hyundai brand on more shopping lists. But I don't want to hear any Hyundai fans criticize the Accord's styling. It's obvious that somebody at Hyundai sure likes it. As they say, imitation is the sincerest form of flattery...
I can see this car keeping current Hyundai owners in the fold, and attracting customers from weaker companies, such as Mitsubishi. But I would agree that it is unlikely to steal many customers from Honda and Toyota.
Still, it shows that Hyundai continues to make great progress, and Honda and Toyota had better be looking over their shoulders.
Gosh, I sound like a bean counter. :P
The Sonata came out a bit bland but a lot of customers like that. Keep in mind that Kia will make their version and that should be sportier, so they may be leaving the controversial/stylish version to Kia.
-juice
If grabbing marketshare (or defending it) via the use of incentives were the best path to profitability, Honda would be offering them. But there's more than one way to skin a cat.
Gaining marketshare is good because you have a wider audience and more chances to earn loyal customers. The flip side is what we see happening with the domestics... customers won't buy without cash on the hood. The brand's image is reduced to a bargain brand.
Holding prices is good because the vehicles hold their resale value, maintain their brand image, and retain the higher profit to vehicle ratio. The flip side being fewer units sold and sales going to the competition.
Which method is used depends on the goals of the company as well as their strengths and weaknesses. Apparently, Honda is not overly concerned with marketshare for the Accord and Civic. At least, not right now.
Further, just in the past couple of days I read that Honda's manufacturing capacity in North America is close to maxxed out, and to increase production would require an additional plant. Maybe Honda would refer to not increase its break even by adding a new plant, unless they're confident that demand would increase sufficiently to justify it. In other words, for a small volume increase Honda may be better off keeping its prices higher, and not adding capacity.
They'll increase prices by $500 and then bump the rebates up $500 to offset the increase - net zero change.
-juice
I bet Honda could find ways to increase profitability on Accord and Civic (make more equipment standard on each trim and then raise the price, perhaps?), to offset drops in sales.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
Also, there is some concern that Toyota altering their prices for GM's benefit would amount to price fixing.
Revised tail looks a lot better. The taillights no longer look like they are upside down. They moved the lights to the sides, no longer on the trunk lid.
Sedan looks a bit more like the coupe now.
Nice update.
-juice
But I do agree, the rear of the coupe is nicer than the sedan, so that would be an upgrade.
Another place I always hated the turn signals is BETWEEN quad headlights. Oldsmobile did this in '67-68 on the Cutlass, and Pontiac did it on the '77-80 Grand Prix and the '80-81 Catalina/Bonneville.
On the Accord, the turn signals don't really bother me because they seem pretty well-integrated into the whole headlight assembly, so as not to stick out too much. My biggest concern is that the whole assembly is just too BIG. I think if they toned down the headlights a bit, and made the grille a little bigger, it would help a lot.
On a similar note, has the Civic been recently revised? The other day I saw a Civic coupe with a blacked-out grille with a plastic mesh pattern, instead of the usual big, bulky, body-colored horizontal bars. It looked pretty nice, IMO. Maybe it's just a sporty trim level?
I've always thought trying to emulate coupe-like styling was the current Accord's downfall. Coupes typically have a long hood, rakish profile, and short deck lid. Lots of manufacturers have been giving their sedans short deck lids in an attempt to make them look more sporty. Honda's attempt failed. Combined with the large C pillar and odd-looking bevel at the end of the trunk, what Honda got was bubble-butt.
The new, longer deck lid is a much better match for the rest of the car. As I wrote over at TOV, the new trunk makes it look like the profile has a whole new line. For my part, I'd hoped for a new grill, but the rest of the front is fine.
Andre - The Civic didn't change. Might have been aftermarket, though I think the Si hatch also has a mesh grill.
The overall result is a car that gets more of its interior room from vertical dimensions, rather than horizontal, and that gives them the stubby look.
The headlight design doesn't bother me - but then, I didn't object to the Chrysler LeBaron when it debuted, either.
The Accord still has a great deal of front overhang, and I imagine that the 2006 Civic will, too. Supposedly, Honda wants each new model to earn the highest crash ratings possible, and the front overhang helps it to achieve that goal.
Pedestrian-friendly front-ends will make long overhangs pretty much industry standard. BMW 3 series is one of a few exceptions.
-juice
Don't you just love an automall, with all the dealers side by side?
2020 Acura RDX tech SH-AWD, 2023 Maverick hybrid Lariat luxury package.
Actually, though, I prefer auto shows if I'm browsing because there are no salesmen.
We saw early pics of the Accords, it'll be a while before it's in dealers.
-juice
2020 Acura RDX tech SH-AWD, 2023 Maverick hybrid Lariat luxury package.
If you didn't see those things, you didn't really catch the Ridgeline's innovations.
I wasn't impressed by the interior much either. The back middle seat is rock hard.
-juice
It does have some innovations, and a roomy cab, it's just the whole package (including, or maybe especially, the styling) that turns me off. Just too damn big and bloated, and way overstyled. Something that in the old days Honda would not have done (they jused to be known for clean, almost elegant design, IMO).
Then again, I'm not a truck person much, although I do like older ones (circa '70 chevy and F series), before they became overgrown caricatures. The new F150 is a pig also.
2020 Acura RDX tech SH-AWD, 2023 Maverick hybrid Lariat luxury package.
Used to be Honda dealers were uppity enough to be infuriating to deal with, but I guess they are getting their comeuppance or something...
On a separate note, I had an '05 Civic VP four-door as a rental for a day - an unimpressive little scrap of a car, but I guess for $13K you can't expect too much. It kept up with traffic, had a decent stereo and cold A/C. It also had cheap little manual door locks that weren't aligned with the trim they were installed in, crank windows that needed 40 winds to get to the bottom and felt like they were going to break long before that, and rock hard plastic everywhere that rattled. Not to mention is this the last car on the market to use 14" rims?
HOOO BOY, do we need a new Civic like yesterday.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
Spoke with the dealer about the Ridgline. Apparently they are selling pretty well, he sold 2 of them that morning. I guess the buzz is really going around andd emand is picking up. Well, that's all, gotta go for a drive.
- Proud new owner of an 04 Crimson red S2k... Finally.
How have sales been so far?
VP is like Converse Chucks. Just basic shoes. I think most people buy the more equipped LX.
Congrats on the S2000. Good price, too, my friend is selling a used one for about that much, with a bunch more miles.
-juice
Sales of the Ridgeline are not yet meeting the annual forecast of 50K per year. However, the first month of sales was hampered by the fact that the base model was not yet available. All of the first run trucks were loaded (and freakin' expensive). Many dealers are still trying to get ADM for what they have in stock. They wouldn't be able to do that if units were building up on the lots.
With the truck winning two comparisons in the press, I think the buzz will get out. As production increases to meet demand, the ADM will evaporate, and sales volume will pick up.
http://arlhonda.brownscar.com/New-Inventory.aspx
Markups like that do scare away customers, though. Thing is you can't control the dealers, they are indy owned and operated.
-juice
I just wish this stuff made it to the USA. The same team who developed "Cog" for the UK Accord is back. "Cog" was the ad that used auto parts in a creative display like dominoes. The new ad is named "Grr" and focuses on Honda's green diesel technology. It won top honors as well as several other awards for advertising at a Cannes Film competition. Here's the full article with a link to the ad itself.
http://www.adage.com/news.cms?newsId=45393
Overall, the sedan, in particular, has a more "substantial" appearance. I'm anxious to see the final product.
As for the Ridgeline - are ANY midsize pickup trucks selling well? I seem to recall reading that the Toyota Tacoma, Dodge Dakota and Nissan Frontier are all DOWN despite major redesigns. The Chevrolet Colorado didn't really pick up over the old S-10 until GM began heaping on the incentives.