Honda’s Scary Week Has Nothing to Do With Halloween

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It was 29 years ago today that Honda began production in North America. The Japanese automaker just announced that it will sharply reduce its North American manufacturing — for the second time this year — because floods in Thailand have disrupted parts supplies. Honda will cut its North American output by half beginning tomorrow (Wednesday), and all six of its plants on the continent will be affected through next week.

About 80 percent to 90 percent of Honda and Acura vehicles sold in the United States are built in North America but are dependent on a few crucial parts, especially electronics, that are supplied from overseas — including in Thailand. The disruptions also will delay by several weeks Honda’s introduction of a new version of its CR-V sport-utility vehicle.[more]

You can argue that, of the two biggest Japanese brands, Toyota faced the most acute peril before the March 11 earthquake and tsunami washed over much of Japan’s automotive infrastructure and disrupted industry supply lines across the world. Toyota’s 2010 safety recalls and management hubris were already in play. But Honda clearly has fared much worse since the disaster.

While Toyota’s global production for the most part has been restored, and it has quickened its cadence of crucial new products this year to help in its fight to recover market share in the U.S. and elsewhere, Honda has been a step — or two or three — slower to seize the moment. Its production has recovered more slowly from the Japan natural disaster, for one thing.

And just when Japan’s No. 2 car brand started to get its supply pipelines restored several weeks ago as it recovered from the March natural disaster in Japan, word came that Consumer Reports had graded its crucial new Honda Civic poorly.

When Consumer Reports earlier this year panned the new Civic as “cheap” and “insubstantial” and struck it from the magazine’s recommended list, the downgrade caused another deep wound to Honda’s fortunes in the U.S. market. Not only is Civic an absolute bedrock of a Honda product lineup that focuses on small vehicles, but the new version of the venerable nameplate also was one of relatively few important product introductions for Honda planned for the near future.

According to Automotive News, Honda plans to execute a mid-cycle update of Civic by as early as sometime in 2013 instead of waiting until the normal time frame of spring 2014. Among other changes are likely to be some reversals of features that Honda included in the current Civic as it was designed at the depths of the Great Recession of 2009, such as cheap hard-plastic instrument panels and center console.

But just as Honda was confirming that it plans early fixes to Civic in hopes of getting it right for important critics — and car-buyers — the brand announced that the flooding in Thailand will significantly whack its global production as well.

The Honda brain trust was anticipating introducing the current Civic to American consumers made thriftier by the downturn and its aftermath. What Honda product planners missed was the current, strongly displayed tendency for U.S. car shoppers to settle for, yes, vehicles that are smaller for reasons of fuel efficiency and overall thrift, yet to insist that they’re loaded with features once reserved for larger vehicles.

“I don’t know how much we can do, and how quickly,” John Mendel, Honda’s US executive vice president, told the magazine. “But the comments of Consumer Reports and our customers have not gone unnoticed. We are appropriately energized.”

Ever heard of a worse annus horribilis for an automotive brand? Honda only wishes this kind of horror would pass with Halloween.

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