On July 31, Honda announced its financial report for the first quarter of the March 2016 term. Their sales increased to 15.5% with 3,704,700,000,000 yen compared to the previous term, and even though their operating profit also greatly increased to 16.4% with 239.2 billion yen, the results showed a big difference between the sales in Japan and America.
The sales for the Pilot and the HR-V (Japanese name: Vezel) in North America are in extremely good shape, and they increased to 497,000 units with more 48,000 units (approx. 11%) compared to the previous term. On the other hand, even though Japan has successively introduced new models since the second half of the previous term, their sales decreased by 55,000 (approximately 27%) to 147,000 units. This gap is remarkably big compared to other similar companies.
“I think it is because of the brand that the sales in America are strong. Since Honda was the first to start local production in United Kingdom, their established brand has been currently supporting the Honda of today. There are many things concerning its quality, but right now, the customers are patronizing these products. When we look at it relatively, the Honda brand is strong in America,” Vice President Tetsuo Iwamura said as he explained the reason fo the favorable sales in America.
On the other hand, Vice President Iwamura pointed out, “I recognize that all companies in Japan considerably have very low sales compared to the previous year, so Honda is not the only one losing. There were also wrong estimations regarding the sales of some cars we released, but the Stepwgn and the Shuttle are highly acknowledged.”
“I recognize that Honda is also a strong brand in Japan, but in this market environment, we are slowly stepping on the market trend.”
Certainly, Honda might have a high brand strength for customers who have known about this brand for years, but you can say that it does not apply to young customers nowadays. Because of that, if the market gets colder, the sales of Honda cars will slump. Moreover, because of the series of product recall problems, that slump has been more pronounced compared to other companies.
In regaining favorable sales like in America, isn’t it necessary for the management ranks in Japan to naturally leave the glories of the past and have the strong spirit in reconstructing the brand strength from scratch once again? Mazda has accomplished that concept and the number of their car sales has been expanding in the weak domestic market compared to the previous years. As of now, the existence of Honda’s domestic sales is becoming dimmer and worse.
(Translated by Claire Marie Sausora)