Months of bad news coming out of Detroit has masked the predicament of other automotive manufacturers including those most everyone would consider to be in the best shape to weather the global recession.
We might imagine that a number of smaller full line manufacturers are having a tough go of it, with Fiat looking for a partner and with Isuzu completing its pull out of the North American market later this month. But, to include either Toyota or Honda in with the crowd seems to indicate that things are far worse for the global economy, something Honda seems to have confirmed via recent news.
Like Toyota, Honda has been cutting back on production capacity and has shelved some plans while delaying others. Among the latest developments for Honda is their announcement that several programs have been canceled including an all new S2000 roadster, a line of rear wheel driven Acuras, a V8 engine and at least one hybrid.
The news follows an earlier report that Honda canceled its NSX sportscar program, one of the most anticipated models from the automaker.
However, it must have been Honda’s fourth quarter performance which forced the automaker to institute its austerity plan as the company soon realized that its year over year sales surge (the company was up 3.2% for the year through July 2008 for U.S. sales) had evaporated resulting in a -7.9% drop for 2008. December alone was a disaster as Honda sales dropped 34.7% over December 2007.
To that end, Honda issued a press release containing the following statement: “American Honda’s sales mirror the industry’s current condition,” said Dick Colliver, executive vice president of American Honda Motor Co., Inc. “We believe Honda will be in a strong position when the market stabilizes.”
Honda’s Acura division took it on the chin in 2008 as sales plunged by an even 20%. The entire luxury car segment took a beat down for the year, dispelling the myth that this market was largely immune to a recession.
Honda’s performance pales in comparison to the double digit loss from Toyota (-15.4%) and is nowhere near what GM (down 22.7%), Ford (off 20.5%) and Chrysler (-30%) experienced for the year. But, it also points out that Honda isn’t shielded from the vagaries of the economy, thus the cutbacks.
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