jwong77

http://www.leftlanenews.com/honda-op...h-america.html

Despite Honda’s comparatively small drop in September sales - down just 1.1 percent - and increasing global demand for its products, the automaker’s operating profit fell nearly 81 percent in North America during the second quarter. Honda says that reduced demand - down 9.9 percent overall during the quarter - hurt its operating profit.

Honda has revamped its North American production to focus more on the efficient Civic and four-cylinder Accord rather than its Odyssey minivan and Ridgeline pickup, but the automaker still expects 2008 to post a sales decline in North America.

Honda expects North America to be the only market to decline in 2008 and current company estimates put the drop at about 6.6 percent lower than last year.

Lexmex

http://autos.yahoo.com/newcars/make/...3?makeId=honda

I was taking a look at this and that is quite true on what they are charging for their vehicles. They do need to adapt rapidly in this changing economy.

When I lived in Mexico, many people never considered a Honda just because of their price and didn't see it as stepping up. This has helped Toyota considerably (since Honda is their main and really exclusive target there) by undercutting them.

Threxx

Sticker price for the most expensive civic possible (fully loaded civic hybrid w/ leather, nav, XM, etc) is 26,750. Unless they didn't get anything off sticker and added on an extended warranty, dealer installed accessories, and then included sales tax there's just no way.

xioix

When my sister went looking for Civics the dealer near me had mark ups

jwong77

I think its just a sign of the times, Honda is just as vulnerable as anybody else. Its a tough time for automakers in general.

Threxx

Well adding up the payments includes the cost of borrowing money, not just the cost of the car.
But even with interest payments adding up to 30 grand on a USED civic?? Sounds like he got ripped off badly. That's not a problem with Honda... it's with the dealer.

A lot of the dealers near me do that but they're hoping for somebody really stupid that will pay them or else consider them in their negotiations... they say "OK I want 10% off that car" and then the dealer takes it off the marked up price and still make a killing)

mmarshall

There are reasons, though, why Hondas cost a little more, and they're really not that much more expensive than the competition. But their build quality, when you look at sheet metal, trim, hardware, ease of control operation, door solidness, and many other features, not to mention engine technology and efficiency, is some of the best in the industry (non-hybrid Honda engines have some of te best MPG figures in their class). And, once again, it is Consumer Reports' highest-rated nameplate for general reliability, and highest-overall-rated nameplate in general.

When I reviewed a Honda CR-V some months ago, for example, I was floored by the quality of the paint, exterior and interior hardware....for a base price of roughly 20K. A friend of mine recently bought a new Accord (partially with my help), and it, too, has Swiss-Watch build quality.

So, when you consider what Honda delivers for the price they charge, I don't think it's excessive at all, except possibly for the Fit, which may be marginally overpriced, when you consider dealer mark-ups. And mark-ups on the Fit are becoming much less common now than in the past....some places you can even get one now for a discount.

Don't get me wrong. Hondas aren't perfect....or magic. A number of them have had a history of weak/spongy brakes, and older ones had harsh-shifting automatics and overboosted steering (which is now pretty much a thing of the past). Some of their new steering wheels are unpleasant to feel and use. But it's hard to find another auto manufacturer that gives you better overall quality for the money.....Subaru comes close.

ST430

Sorry, would have to disagree with you there on Honda quality. I've owned:

2000 Honda Accord Coupe (Orange Peel paint, broken transmission at 75K )
2001 Honda S2000 (Plastic rear window fogged up - fixed in subsequent years with glass)
2003 Honda Pilot (Easily Worn leather, and sketchy paint quality on the rubber surfaces, plastic console easily scratched, crappy gas mileage)
2006 Honda Accord Coupe (Orange peel again and noise coming from flimsy drivers door, cheap trunk covers)

I still think Honda is better than most, but certainly not the leader in quality....

GSteg

iTrader: (15)

I bet we could pull up some complaints from many other brands too. Hard to gauge who's leader in quality when you're at this level. There are bound to be problems here and there. I could rack up a list of my own, but you get my point

newr

honda profit drops.. while others lose billions.. relatively, it's not so bad.

TwiBlueG35

Yeah at least they still have profits.

mmarshall

I know there were some automatic transmission issues from the late 90's till about 2003, but if you compare Honda's overall quality to that of most manufacturers, it clearly is a step up....and most of the issues you mention are in vehicles 6-10 years old.

Now that doesn't mean that Hondas are the cars for everybody....each person's needs are different. For instance, I myself, for my own personal needs, am sold on Subarus.

Threxx

My friend's 05 TL was a completely POS. Worst car he has ever owned by a long shot and he has owned many many domestics.

That combined with JD Power's better than average but still not all that great ratings of Honda's and Acura's 3 year reliability ratings has me not feeling as confident in Honda quality as I was if you had asked me 5+ years ago.

mmarshall

Good point.


The key to this, at least to an extent, is that customers are often willing to pay a little more for a Honda than for, say, a vehicle with a poorer reputation. Compare a new Civic, say, with a new Dodge Caliber. Lookat the two vehicles inside and out; drive them, and decide which one YOU woud be willing to pay a litle more for.

So then, if you have millions of customers who are doing this, it's little wonder that Honda is in better financial shape than other companies. Note, for example............how often do you see new Hondas with money-back factory rebates/incentives? Not very often, though it is not unheard of. Honda, in general doesn't HAVE to discount their vehicles to sell them.

ST430

I purchased all of the said above vehicles NEW, and most of the issues appeared in the first year of ownership (I average usually 2-3 years of ownership max). To be fair, I almost purchased a 2009 Honda Fit because i needed a sensible daily driver with good gas mileage. It's quality seemed okay, but the dealer asking price was ridiculous (+1K markup), so I opted for a 2009 RAV4 instead.

Back to topic, I'm sure the loss is mainly attributed to the slow selling, but high-profit larger Hondas (Pilot / Odyssey / Ridgeline). The lower margin, but higher selling lines (Civics / Accord) seem to be doing fine for the most part, but may have taken a revenue hit due to increase incentives on them.