Saturday, October 17, 2009
NOVI, Mich. (AP) — Ask any car company executive how they plan to turn a profit in the future and they’ll rattle off plans to sell efficient and well-equipped small and midsize cars for premium prices.
John Mendel, Honda Motor Co.’s top U.S. auto executive, is well aware that the plans sound as if they were photocopied from the Japanese automaker’s playbook.
The increasing competition faced by Honda’s bread-and-butter models, the midsize Accord, compact Civic and CRV small crossover vehicle, is what keeps Mendel awake at night.
He says Honda will stay ahead of the pack with new technology and by introducing models in new market segments, but Mendel concedes it may have to update its cars more frequently as competitors keep getting better in quality, reliability and fuel economy.
“We don’t have the gap that we had years ago,” he said Friday just before unveiling a new Accord crossover vehicle in suburban Detroit. “There’s nobody out there building junk any more.”
The Accord, Honda’s top-selling car and traditionally among the best sellers in the U.S., Honda’s largest market, is under serious assault from prime competitors Toyota Motor Corp., Nissan Motor Co., Ford Motor Co. and General Motors Co.
All four competitors have four-cylinder midsize models that have passed the Accord in highway gas mileage, and most have received good marks from independent reviewers.
Mendel, speaking before he introduced the new Accord Crosstour, said in some hotly contested market segments, Honda may have to speed up its normal two-year cycle of refreshing vehicles and roughly five-year cycles of total redesign.
Honda is scheduled to update the Accord next year and redesign the car by 2013. But Mendel says the redesign could take place before then as Honda introduces new technologies to raise fuel economy.
New four-cylinder versions of GM’s Chevrolet Malibu (33 mpg highway) and Ford’s Fusion (34 mpg highway) have passed the Accord’s 31 mpg in highway gas mileage, even though Honda usually leads the pack. Toyota Motor Corp. updated its top-selling midsize Camry for 2010 by adding a six-speed manual transmission, boosting highway mileage to 33, and Nissan’s Altima gets 32 mpg.
Both GM and Ford used six-speed automatic transmissions to raise highway mileage with taller gearing that makes engines more efficient by working less. The Accord, though, still has a five-speed automatic.
Honda, Toyota and Nissan have dominated the critical midsize car market for years as Detroit automakers spent most of their research dollars on larger vehicles, said Joe Barker, senior manager of North American vehicle sales forecasting for the CSM Worldwide consulting firm in Northville, Mich.
But in the past two years, Ford, GM and Korean automaker Hyundai Motor Co. have invested heavily in midsize cars and improved fuel efficiency, safety, ride and performance, pulling even or ahead of Honda and Toyota, Barker said.
“The competition, especially in Honda’s sweet spot, is only going to intensify in the coming years,” Barker said.
The Associated Press. All Rights Reserved.