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What's Wrong At Honda? Maybe Everything - Auto Observer

It's unusual for Honda Motor Co. Ltd. to deviate from its rigid model-replacement schedule, particularly for its bread-and-butter volume models such as the Civic. But that's just what the company is doing with the planned Civic replacement, pushing back the car's introduction from this fall until sometime next year.

The next-generation Civic apparently was not on competitive target - and Honda sent it back to the garage for some tinkering. Although some analysts and industry insiders think Honda's choice to rejigger the Civic is a positive signal, the fact the Civic has to go back to the drawing board at such a late stage speaks plenty about how far Honda has drifted from its once-indomitable methods.

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Honda, which always used to be so good at having its finger on the pulse of the buying public seemingly has exhausted its famed product-development mojo. Yes, the cars - including the now almost 5-year-old Civic - still sell. The company reversed losses from the global industry downturn and for the fiscal year that ended in March recorded a $2.9-billion profit, a 96-percent surge. Honda maintains a top-drawer quality reputation.

Yet analysts, industry watchers and even Honda loyalists continue to murmur the company is losing its legendary edge for forward-looking engineering and an uncanny ability to apply that engineering in a way that delights customers.

John Wolkonowicz, manager of special projects for the IHS Global Insight North American auto forecasting group, said the reputation Honda earned in the 1980s and 1990s has allowed the company to hover above recent reality in the eyes of the car-buying public.

"The Honda name is still the gold standard in the industry," Wolkonowicz told AutoObserver. "But the fact is, they really seem to have lost it."

Edmunds.com analyst Ivan Dury says sales Honda, so far, has averted a dramatically precipitous sales slide. Still, consumer shopping consideration for Honda has been down in the first quarter this year at a time when one would expect it to be up in light of rival Toyota's troubles. "Honda's situation has the ingredients for a potentially tragic sales slide. If Honda keeps piling on incentives and sales remain flat or slip, we'll have another story on our hands."



Source: Edmunds.com

Civic Delay: Hitting Corporate Reset Button

The company delayed the Civic because whatever it had planned for the past four years now isn't right. Now the off-message product-development course seems to have reached the top chair.

President Takanobu Ito seemed to confirm at last month's Beijing auto show that he's aware Honda has lost a step or three, suggesting the company's engineering and marketing may have become "complacent," and adding his displeasure over the company's loss of U.S. market share in the first quarter this year.

The Civic engineering team may have been scared straight by a rash of new-model miscues that have left its development acumen in question. For one, it had planned the now-delayed Civic to be larger, but many critics contend that's one of Honda's prime problems: the company has been subsituting size for innovation in - the latest-generation Accord being the chief example.

More directly, another engorged Civic probably wouldn't compare favorably with the 40 miles-per-gallon highway fuel-economy numbers of new models entering the market, including Ford Motor Co.'s 2011 Fiesta and General Motors Co.'s 2011 Chevrolet Cruze. The best a conventionally powered current-generation Civic can manage is 36 mpg on the highway (the slow-selling Civic Hybrid whirrs out 45-mpg highway rating).

But the reasons Honda delayed the Civic run deeper than just proportions or fuel economy.

"The story here is the new products are not up to par," notes Edmunds.com's Drury. "The redesign of the Civic - one of Honda's three core products along with the Accord and CR-V -- could spell disaster if they get it wrong."

Drury notes Honda's trio of three core models make up more than two-thirds of the brand's sales volume.

"I think they looked at the competition the next-generation Civic will face and realized they weren't top of the heap on several fronts," said Wolkonowicz. He thinks almost all of Honda's recently launched models - including those of its Acura premium-car division - have not been up to the standards of the past, by either engineering or styling measures.

Nonetheless, the Civic delay represents "very positive news for Honda," Wolkonowicz said, adding that the company stopping the Civic program in its tracks seems to be a signal Honda is acknowledging its corporate drift.

"This is the most encouraging news of all," he continued, saying the delay of the Civic is an all-too-rare admission from Honda that the next Civic "isn't perfect, like they (perceive) everything they've done before. I don't think they would have done this five years ago."

But, he cautioned of the Civic delay: "I hope it's a more effective use of a year than Toyota got with the Corolla," when it delayed the U.S. launch of the current-generation Corolla from 2007 until 2008. Toyota said the delay was due to scarce engineering resources and to insure quality, but speculation proposed the launch was postponed to tweak bland styling and other competitive attributes.

Backsliding While Competition Is Gaining

Honda's top-of-the-heap standing for compact cars and midsize family sedans has been assailed on several fronts, most notably from the surging Hyundai/Kia conglomerate - but also from a revitalized Ford and General Motors Co.

But Honda's worst enemy recently seems to have been itself.

Wolkonowicz and other industry analysts point to many of the vehicles Honda and Acura currently have on the road as evidence of the company's foundering ways. Wolkonowicz said Honda's product-development backsliding has led to a "string of losers" after Honda spent years developing what many believed were cars with the best engineering-per-dollar value in the entire industry.

Another analyst said many recently launched Hondas are "sloppily designed, not very good to drive and even worse to look at."

All of those shots could apply to the Insight hybrid-electric vehicle, a car designed to showcase Honda's technical ability - and prospectively go head-to-head with Toyota's dominating Prius hybrid. But the company's still licking its wounds from the dismal response to the year-old Insight, which came to market with dumpy styling, unexceptional fuel economy and a thorough cheapness in appointments and driving feel.

Customers seem to agree: the Insight found just 6,853 buyers in the first four months of this year, a sales pace that is a fraction of what Honda projected. "It's really not a very good car," IHS Global Insight's Wolkonowicz declared.



Source: Edmunds.com

There is little reason to believe the Honda CR-Z hybrid coupe derived from the Insight, going on sale in the U.S. this fall, will be any better; European enthusiast-magazine reviews have been politely noncommittal but cannot completely avoid giving the impression the CR-Z, if at least more engagingly styled than the Insight, also is a dud to drive.

Acura Struggles

The waning performance of the Acura upscale division is the topic of almost constant industry speculation, as Acura seems to further alienate its devoted buyers and produce few new ones, searching for a positioning strategy for its front-wheel-drive based luxury cars and crossovers. The brand abandoned its popular (and volume-selling) coupe, its flagship sells in the low hundreds of units monthly and critics insist each new generation of Acura is inferior to the model it replaces.

Edmunds.com's Drury points out that Acura is in the same situation as Honda, relying largely on a few vehicles for the bulk of its volume. The MDX, TL and TSX account for 87 percent of Acura sales. Sales of its other models - RL, ZDX and RDX - are "lukewarm."

Styling Miscues

Honda also has pulled the trigger on a string of stylistic dogs. The original Pilot crossover was bland but fit with the times, but the second-generation Pilot, launched in 2008, looked tired and passe before the first one was sold.

AutoObserver's comment at the time gives perspective to Honda's decision to delay the new Civic: "Launching the new Pilot exposes one of the Japan Inc.'s only flaws: reluctance to backtrack once a course has been set. Maybe after gauging the early reaction, if somebody with power had been able to say, 'This stinks, and we need to try again -- even if it means delaying our precious launch timetable,' the Pilot might have been redeemed."

The styling of the Accord Crosstour has endured near-universal disdain, the aging Ridgeline and Element have never been considered anything other than ugly ducklings and just about every vehicle in Acura's lineup is fanatically unattractive.



Source: Edmunds.com

It's The Engineering, Stupid

But styling is subjective - and in the case of many esteemed brands, vehicles sell well despite weak or even off-putting styling.

Honda's real problem seems to come from the last place anyone - including those within the company - would expect: unconfident engineering.

For some time, Honda hasn't delivered much of the kind of innovation that once was baked into every new generation of vehicle it launched. Even the hardest of hardcore Honda fanboys admit it: from decisions like discarding double-wishbone front suspension for the Civic to wedging a V6 under the hood of the already too-fat new Acura TSX, Honda's answers of late seem to be little more than me-too solutions.

Honda was the first automaker to introduce a hybrid-electric electric vehicle in the U.S. - but quickly and gave away its leadership to Toyota. How? By sticking with the "mild" hybrid strategy of its Integrated Motor Assist technology, effectively backing the wrong engineering horse. Honda gambled the less-complex and less-expensive mild-hybrid approach - inserted into existing models - was the way to go with hybrids. With the Prius and its more-efficient full-hybrid engineering and a dedicated hybrid styling, Toyota blew past Honda and has never looked back.

And what of Honda's unparalleled reputation for engine advances? The company has assiduously avoided the direct-injection fueling that's fast becoming a standard for other makers. Honda backed away from a plan to make diesel engines one of Acura's technical calling cards.

While rival automakers are turning to high technology to generate more power from smaller engines - once a Honda forte - Honda's march has been to simply make its engines larger (insiders already are saying one change to come from the Civic's delay will be the move to a high-tech "downsized" engine). Other makers have bypassed Honda even in its area of perpetual engine leadership: advanced valvetrain designs.

Honda had long been able to claim being the U.S. market's fuel-economy leader. Hyundai stole away that badge last year.

The same week it acknowledged the plan to re-engineer the Civic, Honda also confirmed a second delay in the production timeline for its high-profile HondaJet corporate jet. HondaJet production now is scheduled for mid 2012, two years later than originally promised.

"It's not going to be so easy for Honda anymore," to maintain its engineering reputation, Wolkonowicz said. "Honda had a kind of superiority complex for many years. It became part of the internal culture. They need to do some soul-searching." - Bill Visnic, Senior Editor
 

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Discussion Starter · #3 · (Edited)
CLIFFS:

Honda's delay of the Civic is, most likely, an admission of the error of their ways, they're no longer the forward thinking, innovative company they used to be. Honda has simply made their cars bigger and put bigger engines in them.

They even note how they haven't even made any strives lately to innovate their engines, with Honda failing to implement DI and they axed their diesel engine offering in Acura.

They then go on to note how their hybrids suck, how awful the Insight is, how Honda sticks with its less efficient and cheaper IMA system while Toyota continues to kick its ass in hybrid sales despite the fact that Honda was among the first to even offer a hybrid vehicle. The article also mentions how ugly their cars are now.

They also mention how their shrinking market share in the US and how Hyundai has beat out Honda in being the most fuel efficient car company in America all proves this. They've lost their innovative and creative ways and have become too complacent due to the success they've had previously.
 

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maybe this finally means they'll so something right..and either bring back the S2k or re-do the Si with a 2.4T like CHH teased :giggle:
 

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While rival automakers are turning to high technology to generate more power from smaller engines - once a Honda forte - Honda's march has been to simply make its engines larger (insiders already are saying one change to come from the Civic's delay will be the move to a high-tech "downsized" engine)
What the hell would that be? Only news I had heard would be an "upsized" K24...This is a little interesting.
 

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Agreed on all points, this was the last generation of civic I was considering after researching what they had in store for the 9th gen.
 

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is it THAT hard for honda to come out with a ~250 hp car that isnt overweight? if they simply had a civic that weighed in at 2700 pounds with 250hp for the SI model, those things would sell like hot cakes. wtf honda
 

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is it THAT hard for honda to come out with a ~250 hp car that isnt overweight? if they simply had a civic that weighed in at 2700 pounds with 250hp for the SI model, those things would sell like hot cakes. wtf honda
imo honda needs to get back to what they do best. . . a 2000 lb. car with an INCREDIBLE 2 to 2.4 ltr motor in the 200-240 hp range, they should stop being stupid and blowing money on stuff like the new nsx and then decide not to release it to the general public
 

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I'd like to see Honda re-release carbon copies of previous generation cars. Imagine seeing brand new previous Gen CR-X's, Del Sols, Civics and Preludes for sale on your local Honda lot......

Yeah... I know.... not really a possibility......
 

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Honda, its time to go Direct Injection and turbo the 2.0L K-series motor. I'd have to agree that the 06-08 civics looks the best. I don't know how the new facsia and grille designs passed implementation into mass production. Honda styling is the ****.

10 years ago, Honda had the Prelude, which was making 200hp with 156tq from a 2.2L motor. Now they have a Civic Si with 197hp and 139tq.
 

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They're no longer innovative like they were back in the 80s & 90s. They're quickly being passed by. Hyundai & Ford are on the rise (in the U.S.).
 

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this article isnt really aiming at performance cars, there was only 1 plug in there that said even the most fan of honda fanboys is starting to admit this. They are just lacking overall.

my civic isnt comfortable, nor does it handle well.

cost (msrp) almost 19 grand, but is a stripper compared to a hyundai accent wagon.

isnt fast, yet not best in fuel economy.

this article is mainly pointing out that they are basicly running out of fume from the 80s and 90s now.
 
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