What's the matter with Honda, especially in Canada, and can the ninth-generation 2012 Honda Civic fix the problem or problems?
Consider: Last month Civic sales plunged 51 per cent compared to a year ago in January. Five rival compacts all out-sold the Civic: Hyundai Elantra, Toyota Corolla, Mazda3, Chevrolet Cruze and Ford Focus.
The Civic may have finished 2010 as Canada's best-selling automobile for the 13th straight years, but Civic sales last year were down 8.2 per cent, to 57,505 from 62,645 in 2009.
Overall, Honda brand sales were down 0.7 per cent, while sales at Honda's luxury brand, Acura, were up just 1.5 per cent. New vehicle sales in Canada last year were up about seven per cent, reports DesRosiers Automotive Consultants, which means Honda underperformed in the market and the Civic really stumbled.
Ever-sunny in disposition, Honda Canada Executive Vice-President Jerry Chenkin says the Civic actually did quite well last year, all things considered. Yes, Honda slapped on incentives to ensure another sales crown, but he also says Civic incentives were richer in 2009. Virtually all Civics are bought by real retail customers, not fleet buyers, he adds, throwing yet more positive spin on a poor performance.
This week at the Canadian International Auto Show in Toronto, Honda's latest, best hope for resurgence is on display at the Metro Toronto Convention Centre. So-called "concept" versions of the 2010 Civic sedan and Si coupe offer plenty of details about the new Civic lineup going on sale in April. Honda calls these concept cars, but the company has a rich history of showing concepts that are almost identical to the finished product.
Finished concepts or not, Honda does not want the 2012 Civic to follow in the footsteps of recent new Honda models such as the CR-Z and Insight, both duds.
The CR-Z, a two-seat, gas-electric hybrid, somehow managed to raise the ire of Consumer Reports, long a fan of Hondas. CR said the CR-Z scored "too low for us to recommend." Among the car's many faults were a stiff ride, poor steering feel, poorly tuned stability control, and "lousy" visibility.
The Insight hybrid, said CR, has a cheap interior, mediocre fuel economy by hybrid standards and a noisy power train. Honda Canada sells barely any Insights at all. Honda has also been targeted with barbs about the Accord Crosstour and the slow-selling Acura ZDX crossover has been juiced with $12,000 in cash incentives.
Then there is the Honda Pilot SUV. It's been widely panned as a Hummer lookalike and we all know what happened to the Hummer brand. Naturally, sales have been disappointing. The Odyssey minivan is all-new for 2011 and the engineering is first rate. However, the Odyssey remains pricy in a minivan world filled with discounts and the wild styling is polarizing.
The Accord, sedan and coupe? Discounts. Honda Canada has resorted to discounts to move the metal. That's been unheard of at Honda for years, but no longer.
To be fair, Honda is still a very, very good engine company and is profitable, less so in recent times. Still reeling from ceding its spot as Japan's second biggest auto maker, Honda Motor Co. said its net profit shrank for the first time in five quarters in the three months ending Dec. 31, 2010. Profit sank 40 per cent from a year earlier under the pressure of a strong yen and slack domestic sales.
Nonetheless, Honda lifted its full-year net-profit forecast by six per cent to 530 billion yen (US$6.4 billion). If successful, Honda would be the most profitable of Japan's major auto makers, ahead of Nissan Motor Co. and Toyota Motor Corp.
The challenge for Honda is simple enough: the competition has figured out what it takes to tackle the No. 1 Civic and other models, and is coming to the market fully loaded with innovative features and sexy designs.
The Elantra, for instance, looks stunning and is equipped with an efficient and sophisticated four-cylinder power train lineup. Ford's Focus is gorgeous, will be sold as both a sedan and hatchback, promises to be entertaining to drive and will be offered with cool technology such as the EcoBoost engine line with direct injection and turbocharging.
The new Civic? Well, long overdue. Honda last year chose to extend the lifecycle of the Civic for almost another year and that certainly hurt sales. Rumour has it Honda delayed the launch to conserve cash during the economic downtown.
More than a few keen observers are looking to this new Civic as a measure of whether or not Honda still has "the touch." Will buyers want this Civic so much they'll pay full sticker price? Or is this once-golden car company really in a slump, struggling to nail new products with in-demand features, performance and technology.
Honda, naturally, says the ninth-generation Civic is "completely revolutionized" and will raise the standard for innovative technology in a compact car. Hmm.
What's indisputable is that Honda and Toyota no longer have a lock on the small car market, not as they once did. Detroit's automakers were not really even in the game for decades and at the affordable end of the market neither were the Europeans. South Korea's Hyundai has been selling boatloads of Elantras and Accents for years and years, but only because they were priced like bargain basement transportation appliances.
Now, Hyundai has a snazzy new Elantra, Ford has an excellent Focus on the way in weeks (check it out at the Toronto auto show, too) and Chevrolet just introduced a pretty darn good Cruze. It's easy to find analysts and critics who will say these three and others, such as the new Volkswagen Jetta, are now completely competitive if not superior to the Civic and Toyota's Corolla.
To counter the competition, Honda says the new Civic will be offered in regular and sportier Si gas versions, plus a hybrid is planned. Honda says the new gasoline power trains will offer improved fuel efficiency and the hybrid will be Honda's first with advanced lithium-ion batteries.
Truth is, the 2012 Civic is a test of Honda's ability to navigate a far more competitive landscape than anything the company has faced in at least two decades. So ask yourself this question as you wander the floor of the Toronto auto show: Is the new Civic a better looking small car than the Elantra, the Focus, and the Cruze?
If you like the looks of any one of these other three or all of them more than the Civic, how will the car retain the title of Canada's best-selling car in 2011?
Other new small cars you can check out at the Canadian International Auto Show, all of which will debut in 2011:
- Buick Verano: A compact luxury sedan based on a platform shared with the Chevrolet Cruze. The Verano is already on sale in China, where it is very successful.
- Chevrolet Sonic: The replacement for the very said Chevrolet Aveo subcompact. Chevy promises better quality, improved ride and handling and far more entertaining performance.
- Fiat 500: This sexy little minicar will be in selected Chrysler dealers across Canada. No one really knows how well the 500 might sell, but it certainly provides an image boost to Chrysler, Fiat's global partner.
- Ford Focus: A compact, the Focus will go on sale this spring as both a hatchback and a sedan. The design, inside and out, is first-rate, Ford is promising best-in-class fuel economy, quality should be good and the Focus will be available with all sorts of high-tech features.
- Hyundai Veloster: A three-door sporty car, the Veloster is intended to buff up Hyundai's performance credibility – and further showcase the company's technology story.
- Kia Rio: Kia's bread-and-butter subcompact is being reinvented for a highly competitive marketplace. A sister version of the Rio will be sold by Hyundai and it's called the Accent.
- Lexus CT 200h: A small but well-appointed hybrid, Lexus says the CT 200h extends the brand into more affordable territory.
- Mini Countryman: The Mini SUV, which seems something of an oxymoron, is an interesting entry. The Countryman will help determine how far Mini can extend the brand into new segments beyond its core Mini Cooper market.
- Toyota Prius v: Toyota says this is "an all-new crossover addition to the Prius family," with cargo space "to meet the needs of families with active lifestyles while providing class-leading fuel economy." The Prius v is one of several Prius brand models, including the original hatchback and a coming plug-in Prius.
