TORRANCE, Calif. — During the glory days of big pickups and sport utility vehicles, one automaker steadfastly refused to join the party.
Despite the huge profits that its competitors were minting by making larger vehicles,
Honda Motor never veered from its mission of building fuel-efficient, environmentally friendly cars like its Accord sedan.
“I remember being at the Tokyo Motor Show in the mid-1990s and talking about the environment,” said Ben Knight, head of engineering at Honda’s North American division. “The reaction was there’s no return on that.”
But in today’s fuel-conscious automotive market, Honda is reaping the rewards for its commitment.
No major automaker in America is doing better than Honda, whose sales are up 3 percent for the first seven months of this year in a market that has fallen 11 percent. By comparison,
General Motors is down nearly 18 percent,
Ford Motor has dropped 14 percent, and
Toyota has slid 7 percent.
While competitors are scrambling to shift their product lineups to build more small vehicles and slash their bloated inventories of trucks, Honda can barely keep up with demand, particularly in the subcompact category.
Sales of its tiny Fit have soared 79 percent so far this year, and interest in the vehicle is so strong that Honda accelerated the introduction of the 2009 model, which will go on sale Tuesday.
The Fit’s four-cylinder engine gets 34 miles per gallon in highway driving, but the quirky little hatchback does not scrimp on creature comforts. The base model — which sells for $15,200, including delivery charges — has a satellite-linked navigation system and safety features like side-curtain airbags.
Honda’s focus on fuel efficiency is paying off on the bottom line as well. The Japanese automaker reported a record profit of 179.61 billion yen ($1.68 billion), during its fiscal first quarter that ended in June, an 8.1 percent jump from the previous year.
By comparison,
G.M. and
Ford have lost billions this year as the market has moved away from the big vehicles that once generated the bulk of their profits. Detroit is moving radically to downsize its vehicle lineups and, in Ford’s case, to convert assembly plants from making trucks to
small cars.
Even Honda’s larger Japanese rival, Toyota, is hustling to adjust to the rapidly changing United States market.
Toyota dedicated its latest American assembly plant in Texas to building full-size pickups. Honda’s newest factory, in southern Indiana, is set to begin production of Civic compact cars this fall.
Honda’s focus on fuel efficiency and the environmental impact of its vehicles dates back to the Clean Air legislation of the 1960s and 1970s. Mr. Knight, the head of Honda engineering in North America, recalled how Honda adopted an internal motto — “Blue skies for our children” — as a guideline for future vehicle development.
“The discussions inside the company have always been consistent,” said Mr. Knight, who joined the company in 1976.
Honda has posted the highest corporate average fuel economy of any automaker for its overall fleet of vehicles over the last 15 years, according to federal statistics.
The fuel economy of its cars is comparable to Toyota, but Honda has never aspired to build a full line of trucks and S.U.V.’s.
Its lineup includes the midsize Ridgeline pickup, as well as lighter weight, car-based crossover
vehicles like the CR-V, Element and Pilot.
“Honda is a philosophy-driven company,” said Tetsuo Iwamura, president of Honda North America. “Even when the large S.U.V.’s and trucks were big sellers, they did not fit with our philosophy.”
Honda’s dealers pressed the company in recent years to build a full-size pickup and introduce a V-8 engine, said Dan Bonawitz, head of corporate planning in the United States.
“We kept asking ourselves what value Honda would bring to the customer in that category,” he said. “There was just no benefit for us to get in it.”
Sales of Honda’s crossovers, minivans and pickups have dropped this year along with the overall market. But the surge in sales of its cars has more than made up for the shortfall.
Unlike many other automakers, Honda has been able to capitalize on the switch in demand to cars because of the flexibility of its assembly plants.
At Honda’s plant in East Liberty, Ohio, for example, the assembly line can switch almost seamlessly from Civics to CR-Vs.
When the new plant goes into production in Indiana, Honda’s North American production capacity will increase to 1.4 million vehicles a year to meet the growing demand for its small cars.
By BILL VLASIC
My Response: In class, we spoke about how men don't pay attention to the woman they have until another man is looking, then he wants to treat her right. This is what the automakers are doing. General Motors and Ford didn't care anything about making fuel efficient cars until they realize their gas guzzlers weren't selling. Now they want to join the " Save the Environment" crew. Too bad they didn't take action sooner, because it's looking like it's a new new #1 coming to town!
