Has Honda's run - run out?

ateixeira

Look what it did for Mitsubishi. :surprise:

Just kidding, folks.

-juice

varmint

I know you're kidding, but, on the other hand, extending the warranty might not be a bad idea right now. They don't have to move to a ten year warranty, but something longer than the current offering might be well received. Especially for the powertrain to combat bad press on the V6 trannies.

I've been against it the past because (like the 0/0/0 deals), it makes the company look desperate (same thing with the Big 3's incentives). But so many companies have longer warranties, that stigma is decreasing.

varmint

I don't think they can move up the Civic launch for logistical reasons.

However, you may have read my comments at TOV regarding the return of a four year cycle for core products like the Accord and Civic. It's not easy to make a business case for it, but it would turn the rest of the industry on its ear.

davem2001

Well, I said way up above in this thread, I think Honda now has too many models to worry about to go back to a 4 year cycle. When they were on a 4-year like clockwork cycle, they basically only had the Accord, Civic, Prelude, and maybe a Japanese only model smaller than the Civic. As their lineup has expanded, it's tough to do. If they went to a 4 year cycle on the Accord and Civic, they'd probably have to go to a 6 or 7 year cycle on some others just to balance it out.

nippononly

in general, it is more acceptable to have 6-year model cycles for trucks and perhaps the minivan too. The thing with the Odyssey is, its last run was only five years, and at the end it was being called "a little dated" by the press even though it continued to win an award here and there. So a 6-year cycle there might be risky.

But look at trucks: the domestics go 7 or 8 years with theirs, sometimes even more, and Toyota usually goes about 6 years, sometimes 7 (like with the last 4Runner). Ridgeline could definitely wait, and since Odyssey's biggest competition is Chrysler, maybe Odyseey could wait an extra year too.

If they do that, they could probably afford to go to 4-year cycles for Accord and Civic, and varmint is right - that would turn the industry on its ear.

varmint

It's very complicated. Enthusiasts like us probably have no idea how big an impact it would have... but since that's never shut us up in the past...

Honda also had fewer resources when they did the 4 year cycle years ago. They have become far more profitable in recent years. Honda also didn't have the flexible manufacturing process they now have in place at East Liberty and Marysville. A few years ago they went from producing the old Accord to the new model in one weekend. They have new challenges today, but have also freed themselves from the constraints of 10 years ago.

The question is whether or not it would be profitable. And would the impact be significant enough even if it isn't profitable. Perhaps it would cost Honda 10% more to do this, but if it forces the others to follow suit or lose marketshare, it might cost them even more (making it worth the loss).

varmint

"...varmint is right - that would turn the industry on its ear."

You had doubts!?!? :P

Yeah, I think Honda needs a new way to compete.

I mean, how much sportier can family sedans get? How much more refined can they be? How much more luxury content can they offer? No matter how much manufacturers improve the design, the competition can always match it. And I think we've reached a point of diminishing returns in many of these areas.

So, they need a new way to compete. Shifting back to a 4YC for the most competitive markets is one way to do it. I'm sure there are others (Hyundai did it with their warranty), but this is the strategy I think is most interesting.

nippononly

Well, one thing I truly believe is there is no limit to the amount of luxury content they can stuff in a family sedan - people will always want more, and there will always be more to give (and charge for). Actually, Honda suffers on this count, because its luxury content ceiling is much lower than other brands', due to the existence of Acura, which is too close in spec and content to Honda.

anonymousposts

Accord can be had with dual-zone climate control, heated seats, power seats, 6-disc changer, etc. What content is it missing? Sure memory seats would be nice and maybe HID's but if I want all of that I could buy a TL or TSX. The Accord is still very reasonably priced when compared to most of it's competition and it still offers most, if not all, of the features the others do.

gee35coupe

Well if you are referring to your customers, they woudln't be on a Honda lot if they wanted RWD unless they wanted a S2000. Honda has nothing to offer. It's "sad" because the upstart Hyundai is already contemplating a RWD model this soon. I bet they have a V8 soon too.

There's obviously a market for RWD with the 300C, G35, GS, Bimmer, Benz etc all offering RWD models. GM is even coming out with a new RWD platform. While I love my Hondas, I think they need to step up the R@D on some more competitiors to the established markets than the niche vehicles that they have been introducing lately.

lmacmil

Honda still hasn't posted their May sales results on their media website. If sales news is good, it has generally been posted on the 1st day of the month. Wonder if they're trying to figure out how to put a positive spin on it?

I don't think you can blame lower sales on a slow start for a new vehicle. Any sales of the Ridgeline should have added to the total, not subtracted from it.

nippononly

yeah, that in itself was positive spin by the Honda folks - they had hoped to boost the bottom line with great Ridgeline sales against what they knew would be down numbers for Civic and Accord. But you are right, sales of a brand new model cannot be responsible for a downturn in sales!

I know there have been countless theories and posts and discussions and all, but I am truly scratching my head wondering why Accord sales have declined so drastically in the last 12 months.

I notice that Toyota's brand-wide cash incentives have risen 17% in the same time, and I know Altima also has great incentives for this fairly old model, and I cannot help but think that it is purely pricing/marketing. Accord is the only one not offered with cash on the hood to the consumer, and with Toyota and Nissan stepping it up a lot, and GM and Ford already at their well-known record levels in that regard, Accord is bound to lose out as a mainstream player.

They increased standard safety content for MY 2005, now they need to increase equipment even more for '06 if they expect to hold the price constant. At least I am starting to see lots of TV ads for the Accord. That is something else it had none of for a while - advertising.

npaladin2000

Maybe the best thing Honda could do is buy out Mitsubishi? That would give them extra factory capacity, more R&D, and the rights to the Evo-monster.

Plus they'd end up with a longer warranty. The only ones left with 3 years bumper to bumper and nothing else are Honda and GM. Ford, Toyota, Dodge all went longer. Hyundai and Kia set a new benchmark with their 5/10 warrantys. Mazda you can get a 4/4, Toyota a 3/5, Dodge a 5/7. Even Ford is giving a 3/5 on several models now. Honda? 3/3...GM? 3/3. Oh...and Honda has no hatchback.

Incidentally, I could have told you that CR would love the Ridgeline WAY before the mag came out. You see, it says Honda on it...whenever CR sees the name Honda or Toyota, they start off by putting one of those red checkmarks on the hood of the vehicle. Personally, I see several problems with the Ridge:

1. Rotten for towing. A lot of people who buy trucks at least consider the thought of towing a trailer at some point. Jetskis and such.

2. The load floor of the bed is WAY too high. On top of having to lift heavy things higher, that's also going to raise the center of gravity when there's a load in the bed. I know they did it to avoid wheel-well intrusion, but the reason most beds are low enough to involve the wheel wells is to lower the center of gravity.

3. Honda has ZERO experience building trucks. Only time will tell whether or not the Ridge can hold up to truck-stress. Especially since it's not really a truck, but a unibody with a bed. And they haven't tended to do well, historically.

4. Marketing to previous Honda owners is a mistake. Previous Honda owners bought cars. People shopping for trucks go to Ford or Toyota or Dodge etc. This is (theoretically) a truck and Honda has no idea how to market a truck.

anonymousposts

I "need" a truck but I don't "want" a truck. The Ridgeline would fit in great there. I would probably never tow anything more than a light trailer with lawn equipment and it would never go off-road. I could throw hay in the back and not worry about it whereas it takes some planning in our Odyssey. To me, it seems like a pretty useful vehicle if you don't "want" a truck but need some of the capabilities a truck offers.

As for the jetski's .. I have seen people tow jetski's and small motorcycles with 93-95 Civics. Talk about not suited for towing.

Considering the Ridgeline's specs it would be smart for Honda to market it to those who haven't owned trucks before. They would be less likely to use it for heavy-duty purposes, IMO.

chuck1

"Rotten for towing."

I guess it depends on how heavy a thing you want to tow! It's rated at 5,000 pounds towing capacity. These days you can buy a 27' trailer (the new "ultra lights") that weighs between 4,200 and 4,400 pounds dry. How much more do you need?

I read a review on the Ridgeline where the reviewer said they had a 5,000 pound trailer hooked on it to show the towing capacity of the Ridgeline and it towed quite well with enough pull.

The Ridgeline is the only "Pickup" I would ever consider. And I am not a Honda owner!

varmint

I believe the Ridgeline is marketed at many Honda owners because Honda's survey found that 25% of all CR-V owners also owned a truck as a second or third vehicle.

As for towing, it's about mid-class. SportTrac is rated for 5,000 lbs. Colorado is rated for 4,000 lbs. Of course, the Frontier and Tacoma are both rated for more than 6,000 lbs. Mediocre? Yes. Rotten? No.

Honda had zero experience when they built their first American style minivan in 1999. They didn't have any experience with SUVs when they began selling the MDX. Poor buggers...

varmint

I haven't found anything regarding Honda's use of incentives this month. I've seen articles which report incentive raises by the "Japanese", but nothing specific to Honda. As Nissan and Toyota are both more likely to use incentives, I can't say how much (if any) of that raise comes frmo the pockets of HMC.

rsholland

2. The load floor of the bed is WAY too high. On top of having to lift heavy things higher, that's also going to raise the center of gravity when there's a load in the bed. I know they did it to avoid wheel-well intrusion, but the reason most beds are low enough to involve the wheel wells is to lower the center of gravity.

Look again, there are wheelwell intrusions. They may be smaller than on other trucks, but they are there.

Bob

alfox

Well, I wouldn't say it's rotten for towing, but it certainly isn't class-leading. Frontier tows 6,100, Taco 6,500 and Dakota 5,650. The Colorado is lower at 4,000.

"It's rated at 5,000 pounds towing capacity. These days you can buy a 27' trailer (the new "ultra lights") that weighs between 4,200 and 4,400 pounds dry. How much more do you need?"

What you need more is the cargo capacity of these trailers, which brings them up to GVWR, then you need a safety factor. Prudent people don't tow right at the GVWR for the tow vehicle. Most give about 20% safety factor. Therefore, a prudent peoson wouldn't tow much more than about 4,000# with a ridgeline. Also, the WB is too short on a compact pickup to tow a long trailer, and the Ridgeline's the shortest of the bunch. But that's all fine, that leaves the utility trailers, small travel trailers and most ski boats, and that's what the truck is really designed for.

mariner7

One reason for Honda's anemic sales is lower incentives. But one reason for its lower incentives might be that it's not as profitable as its rivals. Harbour's reported profits per US made vehicles for 2005Q1: Nissan $1603, Toyota 1488, Honda 1250.

I think these are after incentives, because GM's figure is -2311. There's no way GM loses that much before doling out thousands of incentives.

Even with lower incentives, Honda doesn't make as much profits. So to keep profits up, Honda might not be willing to match its rivals' incentives. The gap between Nissan and Toyota is 115, the gap between Toyota and Honda is twice as big at 238.

Last year, the figures for Nissan and Honda were much higher at 2000 and 1500. Incentives have already taken their toll.

stickguy

Honda could probably make a fortune just desiging and building engines for other makers. Just leave the auto trannys to someone else.

varmint

Yes and no. The Harbour report doesn't reflect profitability across the board. It only includes plants in North America (not worldwide). And, even then, Harbour may not include all of the plants for a given manufacturer. In past reports, they've included only 2 of the five Honda plants operating in North America. I honestly don't know how many were included this year, but you might find it on the Harbour website.

And, of course, the same applies for Nissan and Toyota. Their overseas plants, or assembly plants in Central America are not included. While the Harbour report is a good measure for the plants who report back to them, it is not a complete picture for the manufacturer.

npaladin2000

"They didn't have any experience with SUVs when they began selling the MDX. Poor buggers..."

They STILL don't have any experience building SUVs. The MDX isn't a true SUV.

Why didn't these guys just buy Izuzu outright? Izuzu doesn't make cars, Honda doesn't make trucks. A match made in heaven.

grbeck

Considering the recent sales figures posted by "true SUVs," it isn't necessarily a bad thing that the MDX doesn't fit into that category.

mariner7

I just wanted to point out that the reason for Honda's low incentives is simply it's not as profitable as its main rivals. Not because it's somehow more philosophically opposed to incentives than Nissan and Toyota.

I'd say Ridgeline's the third in the string of Honda's doing it our own way, different from everybody else. The first two are Element and RL. Element, I hardly ever see anymore, it can hardly be called a success. RL seems stuck in 3rd place in the sales sweepstakes behind GS and M, so it also can't be called a sucess.

stickguy

Honda traditionally also had lower spreads bwtween invoice and MSRP, so there effectively was less room to discount. That's why (IMO) Honda's always seemed to be good values, even at sticker.

They may have changed lately, I know there was a bigger spread on our '05 Ody, but that was also more expensive.

varmint

:shades: Well said.

When you compare the sales and profits of the CR-V and MDX versus the Isuzu cloned Passport and SLX, there's really no question about it. The cross-overs in the Honda lines have been far more successful than the "real" SUVs.

Perhaps we should say, "Thank God Honda didn't have experience in SUVs".

varmint

I understand your point. But I'm not sure that the Harbour report proves it. Are you really sure that comparing "some" of Honda's factories with "some" of the Nissan and Toyota plants gives a complete picture?

I know from reports in the media that both Nissan and Toyota are more profitable than Honda overall. That's not an issue. But I'm not so sure they are more profitable per vehicle. I mean, Toyota is way profitable because they sell a full line of cars and trucks. They are also the dominant player in Japan. Honda doesn't have the full line and is not as big overseas. The point being... there are other factors which could explain the difference in profits.

ateixeira

Nissan sets a higher price and then comes back with a rebate to even things out. Even the well-like G35 has a big rebate now.

I say rebates are being mis-used by the car makers. They set prices optimistically and then rely on rebates to "correct" the too-high prices. Then again, customers love them, so it's hard to find a balance. IMO a small incentive is OK, but when you hit several grand you've just lost it.

This is not a problem for Honda/Acura.

Longer Warranty? Sure, that might help.

If the cars are as reliable as people say it won't cost them anything.

But don't count on acquiring Mitsubishi to accomplish that. Finbarr O'Neill was the master mind behind all that, and while he saved Hyundai even he could not help Mitsu. He bailed out a while ago, so who knows if Mistu will even be around long enough to honor that warranty. And go look at used Daewoo prices.

Isuzu is, for all practical purposes, now just another sales outlet for GMC trucks. GM got the diesel engines they wanted and now Isuzu basically only does commercial business. They are already dead. There is nothing for Honda to buy.

I don't think acquisitions are the way to go. They did well building a 2nd assembly plant so they could finally meet demand for the Ody. Slow, steady growth is a smart strategy.

-juice

mariner7

Harbour doesn't give the full picture, but it's as good a snapshot as we're going to get. Seems to me if we don't have anything else, it's reasonable to use it for comparison.

Did you question why Honda didn't match their rivals' incentives and their market share growths? Press reports would have you believe Honda's philosophically opposed to incentives. But so are Nissan and Toyota, in fact Ghosn was boisterous in talking about it. Honda is in the business of selling cars and making money, not in an ideological battle over incentives.

Then I saw the Harbour report and it hit me one reason Honda might not want to match their rivals' incentives was its profits per vehicle are lower than theirs. Because of higher profits, those rivals have more pricing options.

jgriff

Honda could probably make a fortune just desiging and building engines for other makers. Just leave the auto trannys to someone else.

Amen!!!

nippononly

might have the highest percentage of models that sell at sticker of any of the large manufacturers. Which makes them averse to using cash incentives.

But while that is true of some models, it is far from true for the current Accord. I am sure it could afford rebates in the range of $500-1000 per vehicle like Toyota has, at least for a short while. It can end them in a few short months when the revised Accord and new Civic arrive. Summer is traditionally the hottest (no pun intended!) time for car sales, and it is beginning as we speak. Where's the harm, Honda?

ateixeira

Maybe in the CEO's words, but not in their actions.

Do you realize you can buy a base Sentra for $9 grand after incentives? G35, Quest, Armada, Titan - they all carry large incentives now.

-juice

varmint

I think in many cases what they do is bolster the incentives, but cut back on content at the same time. I mean, the car still comes with four wheels, but it might no longer have an ash tray. Leather inserts might be replaced with plastic... Little stuff like that goes without anyone noticing.

If prices were more or less arbitrary (I know that's not what you're saying, but hang with me for a second), then automakers could inflate MSRP and adjust the price using incentives without fear of taking a loss. But that does not appear to be the case. The domestics and others are complaining about losing profits with those incentives. It's not just playing with numbers.

Ditto what you wrote on Mitsu and Isuzu. Acquiring those two would be like grabbing an anchor in each hand. The liabilities far outweigh the benefits.

varmint

For the past year, Honda's incentives have run between $900-1,300 on average. So, you can bet they are already using 1,000 to move the slow sellers (Civic Si) and the volume models which cannot maintain MSRP (Accord and Civic). If you figure that vehicles like the Ody, CR-V, and Pilot probably don't see any of that money, the "average" could mean as much as $2K for other vehicles.

Nissan is actually the big spender when it comes to incentives. They consistently had higher spending averages than both Toyota and Honda for the past four years. But I think they are trying very hard to grab marketshare. With more people buying their cars, they get more word-of-mouth exposure. So the spending is probably justified.

ateixeira

But not in this case - Carlos "le cost cutter" Ghosn did that with the original cars. They are in fact now adding back some content because people complained they felt cheap are were not durable.

This is true across the board - Altima, 350Z, Quest, Titan, Armada all have received interior enhancements.

I'm not even sure they removed any content, to be honest.

Incentive spending is hard to track because it can pay for things like regional advertising. Even incentives that do lower prices often are dealer incentives that you may or may not see.

Ghosn did a good job cutting costs to a point where Nissan could come up with some interesting products, now the hard work will be keeping them profitable as they age and content is slowly added back.

-juice

nippononly

I should have been more specific. What I was referring to were manufacturer to customer cash incentives. I mean, it is logical that Civic is not worth the same dollar figure it was 4 1/2 years ago (or more than it cost then, as there have surely been price increases over the years), since it is now an outdated model in the context of the market at large. So, OK, knock $500 off the price for a few months. Honda dealers are SOOOO stingy with manufacturer to dealer incentives.

Having an EX SE is not a very attractive incentive (which is what they did instead), given what they add to make it an SE. And the low-price leases are only on very basic models. Better to just give people a little money back, then they can use it to accessorize if they want to, or pocket it, but either way you sold the car.

chuck1

http://www.cleveland.com/autonews/plaindealer/index.ssf?/base/business/1117272771306010.xm- l&coll=2

varmint

I think Honda does have a "philosophical" aversion to that sort of thing. The only point in having them is being able to advertise them. Based on what I've seen, Honda's advertising focuses on the product, not the deal. The ads that I see have been running for years in some cases. (Why? I have no idea.) So, right or wrong, developing an ad campaign for what could be a very short incentives program doesn't seem like their style.

andre1969

Didn't that used to be a Cadillac jingle, once upon a time?

jgriff

Honda is and has done everything in their power to hide, down-play, the fact that they have had AT transmission issues since 2000 (and not really a small one). Dealers pretend it is a rare-bird, yea right.

Yea sure Honda/Acura does fixes them, but with rebuilds of the same faulty transmission. Which end up being nothing more than a temporary bandage. Sounds like the bean-counters are simply playing the numbers game, hoping to get owners pass the 100k mark with minimal financial damage to Honda.

How JDP, & CR, keep the rankings up on Honda/Acura V6 autos is beyond me. At one time I was considering a Pilot, but I've decided to look else where.

All I can say is I'm glad I dump my ’01 CL after it's first transmission failure at 36k.

mariner7

You guys still don't get what I'm saying, which is that all 3 don't like incentives. But Nissan and Toyota, especially Nissan, can afford to play the incentives game more, because they're more profitable than Honda.

See this article by Harbour himself: http://www.detnews.com/2005/editorial/0503/27/A15-129850.htm

mariner7

We're so used to GM and Ford using incentives out of desperation, we think incentives must be a bad thing. But Nissan and Toyota use them out of strength, their strength is that they're the most profitable full line companies around. Even with higher incentives, their profits per vehicle most likely are still higher than Honda's.

Yes, with higher incentives, Nissan and Toyota's profits per vehicles go down, but their total profits probably go up, because of increased market shares.

With the market in flux because of the troubles at GM and Ford, this is probably as easy a time to pick up market share as any.

myrtlemtn

I see the posts regarding transmission problems...has anyone heard of anyone citing the Honda S2000 as having transmission issues? I believe I am having some transmission issues and my mechanic (who is brilliant) confirmed it but I can't get Honda to acknowledge it??? Any thoughts??? My car is a 2001 S2000.

davem2001

The transmission that Honda/Acura has problems with is the 5-speed auto connected to the V6 - like in the Acura TL. I've never heard of widespread problems with their manual trans...maybe you just have a "lemon"

gee35coupe

The tranny referred to in that guys Ody was the old 4 speed unit. The 5 speed has been doing pretty good in comparison.

alfox

No, but having had two transmissions fail on a Concorde I can recommend one thing: Document, document document. Keep at Honda to document your problems in their database. Do written service requests rather than stopping by and talking to the service rep, and give detailed written descriptions of the problem. Try to note when the problems occur, and when they do not (needs to be driven 10 miles, or be fully heated up etc.) Make sure they drive the car by noting the mileage in vs mileage out, and save all copies of the repair orders.

Even after the warranty ends if the transmission fails, if you can prove that you were experiencing trouble while under warranty they may help you. If so, the documentation will be your tickets to getting help from Honda. Chrysler replaced mine at no cost to me 8,000 miles out of warranty.

Good luck.

davem2001

The transmission in my TL failed around 30K miles. Replaced at no cost, and they gave me a loaner, but it still leaves me with an uneasy feel about the car - is it going to fail again right after the warranty expires and leave me stuck with a major repair bill?

ateixeira

But that could happen with any car right after warranty.

In fact I think they design things to fail at 36,001 miles. ;-)

-juice

anythngbutgm

9 people here I know with V6 H/A Autos. no problems... :confuse:

- One of them is the kid who details my cars. 98 V6 101k (when I saw him two weekends ago), chipped, K&N, HF exhaust, pulling 268hp at the wheels. Not driven easily, no probs...

- 185k on an 01 TL. (Cousin)

Others range from 99 - 03 Odys, 98, 00, 03 Accord V6's and an 02 CLS.

10th was my dad who traded an '01 MDX in with 130k for a new '05, never had an issue.

11th is my own 03 MDX, 47k, perfect.

Must be something in the New England air :P