It's a Never-ending Challenge

7/8/2010 3:17:56 AM

Kurt Antonius
Assistant Vice President, Honda Public Relations
American Honda Motor Co., Inc.

It is not corporate hubris that tells us people have very high expectations for the Honda brand. It is acknowledging the obvious. And that's not a lament. What we call our "Challenging Spirit" is alive and well - and we welcome the challenge to exceed the "high bar" we have set for ourselves.

Even on those occasions when media or customers express their frustration that we haven't met their expectations, we realize that it's recognition of our history of innovation and focusing on the customer that has always challenged our industry to move in positive new directions. Honda continues to prioritize advancing power train technologies, fuel efficiency, more ergonomic and customer-friendly interiors, and we've always focused on developing vehicles that are fun to drive and fun to own.

We also understand that speculation - in the world of politics, athletics and, yes, the auto industry - has become something of a sport. People look at one or two data points and quickly jump to a conclusion -- forecasting gloom and doom or crowning the latest champion - whether or not the facts support that view.

Importantly, in today's 24/7 news environment, such viewpoints can quickly be perceived as reality - unless you dispel the myths and false assumptions. So, let's begin by addressing some of the concern about Honda's ability to rise to the challenge of new competition and the requirement for product innovation.

First of all, there are many ways to spin sales numbers, but here are a few facts:

  • Accord is one of the industry's best selling cars in 2010 - probably THE best-selling to retail customers.
  • CR-V remains the best-selling utility vehicle in America, 3+ years and running.
  • Odyssey, in its 5th year on the market, remains an award-winning customer favorite.
  • Civic, in its 5th year on the market, saw sales go up 26% in June and is up more than 13% for the year.

To provide further context, you simply can't do an apples-to-apples comparison of industry sales without considering that some competitors have increasingly turned to fleet sales (selling to rental car companies) and direct cash incentives to customers in order to boost sales volume, while Honda has achieved solid sales gains in 2010 without resorting to either tactic.

We don't begrudge anyone doing what they must to move their metal. But we don't sell to fleets and we don't offer cash to customers - because these short term strategies would negatively impact the value of the vehicles in our customers' driveways. Call us crazy, but Honda will continue to rely on retail customers to make informed purchase decisions - and we'll continue to protect the value of their investments.

You can also see this focus on the customer in our focus on quality. In the J.D. Power & Associates 2010 Initial Quality Study, Acura ranked 2nd overall, with Honda 6th - and both Accord and Accord Crosstour were #1 in their segments.

Another myth to dispel is the notion that the delay in the introduction of the next-generation Civic - due out in 2011 - is indication of a hasty decision made in recent days based on present market conditions. As first reported by Automotive News in October 2009, our decision to delay the new Civic launch was made several years ago, not as a knee-jerk response to the current sales situation. And what is a "delay," anyway, when our primary objective is to deliver the best possible product to our customers?

We're confident in our strategy for the next-generation Civic. But the reality is that it is the success of the current model that enabled us to consider changing the launch timing of the upcoming model. The current Civic continues to offer customers a very competitive combination of style, fuel economy, safety and value - and Civic's current sales numbers support the point.

Which brings this discussion back to the only thing that really matters - what customers want. The auto industry has emerged from arguably its toughest 24 months ever. What does this mean? Customers pushed the pause button on purchases. They reprioritized, and while they're recovering, they're moving with new cautiousness in prioritizing new purchase considerations.

We're all collectively working to understand what customers now want and need. But the reality is that customers don't "need" specific technologies. They need affordable products that provide the performance and comfort they desire, with higher fuel economy levels that help them cope with escalating fuel prices and that reduce the threat of global warming.

Toward this end:

  • A stylish, all-new 2011 Honda Odyssey debuts this fall with a V-6 engine that offers higher fuel economy than a top competitor's 4-cylinder minivan.
  • Accord, already the #1 midsize sedan in 2010 IQS, will debut a revised 2011 model in August, with up to 3 mpg higher fuel economy.
  • CR-Z, a genre-busting sport hybrid model, debuts next month - available to customers chock full of content for less than $20,000.

The marketplace has and will continue to evolve. But our focus on creating real, new value for our customers through innovation and original thinking remains unchanged. And we are accelerating our efforts to develop and deploy new technologies and business strategies that will continue to show that Honda remains a leader in our industry.