Braking News: Honda Hit by Further Recall Woes
No, it's not the automotive version of "Groundhog Day," but yes, a major Japanese automaker did just recall more than 400,000 vehicles for a braking issue. This time it's Honda in the hot seat, though, not Toyota. The affected products: The 2007-2008 Honda Odyssey and Honda Element.
And again, this is no comedy, especially considering the track record of the seemingly snake-bit Odyssey. This is at least the third recent recall involving the minivan, with vehicles from the 2001-2002 model year added to Honda's airbag recall list in February, and the 2005 model recalled in March over problems with its tailgate struts.
As the country's best-selling minivan for the past two years running, the Odyssey is an important part of Honda's success in the U.S. market. The vehicle sold more than 100,000 units in 2009, representing about 10 percent of Honda's overall sales (excluding Acura) and making the Odyssey the automaker's fourth-best-selling product.
The highly anticipated and completely redesigned 2011 model is slated to go on sale later this year and was expected (by me, anyway) to be a major driver in growing the minivan segment in the near-term future, assisted by the also all-new 2011 Toyota Siena.
At first glance, there seem to be a lot of parallels here: Two Japanese automakers, both launching new minivans, both caught up in a sudden spate of quality concerns, both with a focus on their products' stopping abilities (or lack thereof). But that's where the similarities end '” unfortunately for Honda.
Against some big odds, Toyota is already clawing its way back to sales respectability, albeit by ratcheting up the incentives. I covered this in yesterday's column, but while I was busy predicting a 2010 discount war, readers will notice I left Honda out of the picture. Which is because that's exactly where Honda may end up: Out of the picture.
Lacking the deep pockets of Toyota, and not quite as desperate for sales as General Motors or Chrysler, Honda is simply not in a good position to start matching these players when it comes to using incentives to buy new customers. In the past, Honda could take the high road and rely on product quality to woo buyers, but that's getting to be a difficult proposition at this stage in the game.
Further, and unlike Hyunda and Kia, Honda doesn't have a lot of new products on which to use this strategy. While the South Koreans are in the midst of launching a seemingly endless stream of redesigned vehicles '” like the Hyundai Sonata, Hyundai Tucson, Kia Forte and Kia Sorento '” Honda will have its corporate hands full trying to push the coming CR-Z hybrid sports coupe, which debuted to lackluster reviews at the Detroit auto show, and straighten out its Acura division. The next generation of Honda's high-volume moneymakers, the Honda Civic, Honda Accord and Honda CR-V, won't be ready until the 2012 model year.
The Acura situation is particularly problematic. The new Acura ZDX, though it's gotten better reviews than its platform-mate, the Honda Accord Crosstour, sold just 172 units in January and 159 last month. The Acura TL, despite its much-hyped all-wheel-drive system, has seen sales drop for three consecutive months.
The division had hoped to get some marketplace traction with new ads that position Acura as an engineering leader, but that's suddenly looking like a tough sell. In a recent story in "Adweek" that took an in-depth look at the campaign, Christopher Cedergren, a senior partner at the automotive consulting firm Iceology, provides the following analysis: "Acura is too closely associated with Honda; they don't have an identity in the marketplace. So the technology [theme in the commercials] makes a lot of sense. They need to hang their hat on something they have '” and engineering is all they have."
But the "Adweek" piece came out the same day that Honda announced its latest recalls, and I have to wonder what Mr. Cedergren would say if he knew about those recalls before he made his comments. Because if consumers closely identify Acura with Honda, and Honda is having some serious quality issues, the idea of precision-engineered Acuras starts seeming a bit oxymoronic.
Now, here's the point where I try to whip out an "on the other hand" or two, so I'll point out that the Civic, Accord and CR-V seem pretty well ensconced among the best-seller lists. All three provide a relatively dynamic driving experience, and all three provide relatively good fuel economy.
But people once thought the Honda Fit was headed for the same kind of long-term success, and we all know how that's worked out. It wasn't so long ago that Honda couldn't build them fast enough to meet demand, but today, sales of the Fit are anything but. February numbers were down a staggering 38.4 percent in January and then fell another 31.1 percent last month '” results that certainly weren't helped by the global recall of 646,000 Fits in January.