Today’s ePaper

e edition
Article Image

In this Honda ad, actor Matthew Broderick plays himself in a grown-up version of his role as Ferris Bueller to promote the 2012 Honda CR-V.


THE ASSOCIATED PRESS


Honda hopes for a better 2012

The New York Times

DETROIT — When everything seems to be going wrong, hire Jerry Seinfeld, bring back Ferris Bueller and pray. And even then things might not improve all that much.

That's the predicament for Honda as it tries to recover from its troubles in the past year, when a series of natural disasters in Asia caused sales to plunge, and an important model, the revamped Civic, got such a poor reception that the company rushed to make changes.

Honda's chief executive, Takanobu Ito, was so fearful that the company might be "jinxed" that he spent New Year's Day at a Japanese shrine in the hope of eliminating the "bad omens," he said recently.

In commercials for Honda shown during the Super Bowl, Seinfeld is desperate to get the first Acura NSX, a concept car not coming to market for several years, and Matthew Broderick plays himself, taking a Bueller-like day off away from the movie set and giving a shout-out to the Honda CR-V.

The two ads were highly rated by viewers, and Honda is off to a better start in 2012, breaking a string of eight consecutive monthly sales declines in the United States with an 8.8 percent increase in January. But analysts do not foresee a smooth road back for the carmaker, whose market share dropped to 9 percent last year, the lowest level since 2005. Its share was 10.6 percent in 2010.

Honda executives, while projecting a 60 percent drop in net profits for the fiscal year that ends in March, have expressed confidence that the company is on the brink of a significant rebound. One goal is a 25 percent sales increase in the U.S. this year, helped by a redesigned CR-V crossover vehicle and several new models for its upscale Acura brand.

Honda unveiled the production versions of the Acuras, the RDX crossover and ILX compact car, last week at the Chicago auto show. They are part of a major push to expand Acura, whose sales last year suffered even more than the mainstream Honda brand.

Honda executives have said they hope to sell 180,000 Acuras this year, which would represent a 46 percent increase. Still, the NSX featured in the Super Bowl ad is not scheduled to go on sale for about three years.

"In order to grow, the product offering that they have needs to be more compelling," said Rebecca Lindland, an analyst with research firm IHS Automotive.

Honda was hit harder than other automakers by the earthquake and tsunami that devastated Japan last March. Its factories in Japan, North America and elsewhere were forced to stop or slow production for months because of parts shortages, and dealerships across the U.S. sold out of popular models.

A rival, Nissan, even ran a commercial showing a loaded Nissan car carrier passing an idle Honda dealer in an empty lot. Honda was just beginning to recover from the tsunami when severe flooding in Thailand compounded the shortages. Executives say dealers should finally be back to normal inventory by the end of March, putting the company back on a level playing field with its rivals for the first time in nearly a year.

Honda has said it might cost $650 million to rebuild a plant in Thailand that was underwater for several weeks last fall. The damage and lost production from the flooding and the Japanese tsunami combined with the high value of the yen to cut Honda's third-quarter earnings by 41 percent.

The company now expects to earn about $2.8 billion in the current fiscal year, down from $6.9 billion a year earlier. Its shares on the Tokyo Stock Exchange are down 20 percent in the past year, though they have risen 20 percent so far in 2012.

In the fall, Honda plans to bring out a redesigned version of the Accord, still its top-selling vehicle. Much of Honda's ability to regain market share depends on the Accord's being successful, and the stakes are even higher after the Civic elicited many negative reviews last year.

In addition, the Accord will face stiffer competition than in the past from other midsize sedans. Besides the Toyota Camry, whose sales have surged since it was redesigned last year, the Accord will be up against new versions of the Ford Fusion, which was a breakout hit at the auto show in Detroit last month, and Chevrolet Malibu.

"There's going to be a lot of noise in the market in that particular segment," said Lindland, the IHS Automotive analyst. "They've got to have a significant home run in order to get people to notice."


Contact the Omaha World-Herald newsroom


Copyright ©2012 Omaha World-Herald®. All rights reserved. This material may not be published, broadcast, rewritten, displayed or redistributed for any purpose without permission from the Omaha World-Herald.

Site map