Car sales in Western Europe continued to rally from a six year slump, but Honda of Japan’s sales dived as its range of CR-V SUVs and Civic small cars proved unloved and too expensive.
And don’t expect an improvement from Honda any time soon.
Car sales rose 7.2 per cent in the first quarter of 2014 to 3.1 million from 2.9 million in the same period of 2013, according to the European Car Manufacturers Association, known by its French acronym ACEA.
Most manufacturers took full advantage of the rise in consumer confidence. Even GM Europe’s Opel-Vauxhall subsidiary managed a 4.2 per cent gain to 236,632, despite deciding to dump its Chevrolet brand. Ford Europe beat the trend with a 10.5 per cent rise to 237,786. Mazda of Japan was a standout with a 24.7 per cent gain to 46,762. Even financial basket-case Peugeot and its Citroen subsidiary increased sales 7.1 per cent to 353,759. Leader Volkswagen of Germany raised sales 7.3 per cent to 749,085, for a market share of 23.9 per cent.
But Honda’s sales dived 8.0 per cent to 36,332, with market share of 1.2 per cent versus 1.4 per cent. Honda cut output at its British factory in March, and now expects to produce 120,000 vehicles at its Swindon plant in 2014, down from 140,000 last year, and capacity of 250,000 Civics, CR-Vs and Jazz city cars. At the time Honda comically put down this setback to “weak demand”, as the rest of the industry acclaimed a turnaround. What it really meant was “weak demand for our vehicles”.
Earlier this year, Honda, in another mis-step, withdrew its Insight and CR-Z gasoline electric hybrids from Europe as sales dwindled.
According to Automotive Industry Data (AID) editor Peter Schmidt, Honda has missed the boom in SUVs in Europe and its CR-V is too expensive and lacks the appeal of products like the Nissan Qashqai. The smaller Civic sedan has failed to compete against products like the Ford Focus and Opel-Vauxhall Astra. The latest design of the Civic was meant to appeal to a younger audience, and was too young-looking and brash for Honda’s much-older than average traditional buyers.
AID figures show in 2013 Honda sold just over 41,500 CR-Vs in Western Europe compared with 190,300 Qashqais, and 136,500 VW Tiguans. Even Nissan’s Juke small SUV, a segment in which Honda has yet to appear, racked up more than 100,000 sales in Western Europe.
“Nissan was in a dreadful state but was rescued by the Qashqai. The styling of the CR-V didn’t help it compete with products like this. And the CR-V was too expensive to make. Nissan used a bog standard car design and put a tall body on it mimicking the looks of an SUV. The CR-V has been left behind in the crossover (SUV) boom in Europe,” Schmidt said.
Nissan first quarter sales in Western Europe rose 7.1 per cent to 123,167.
“The Qashqai alone turned Nissan Europe from a loser into a winner. The lack of success of the CR-V is principally responsible for Honda’s misfortune in the European market,” Schmidt said.
The Civic has failed to sell well, with just under 38,000 buyers in Western Europe last year compared with 280,000 for competing products like the Ford Focus and 181,000 Opel-Vauxhall Astras.
“Honda got it all wrong with the Civic. Nissan has shown that if you have the right product at the right price with visual appeal, it doesn’t matter if brand image isn’t up to much,” Schmidt said.
“Honda’s problems are all of its own making with the CR-V and Civic. They’ve got the wrong styling and the wrong prices. The CR-V doesn’t appeal to buyers that are attracted to the Qashqai and Touareg, and it costs too much to make. VW based the Touareg on the Golf (small sedan) so it used cheap off-the-shelf components. The CR-V should have been based on the Civic,” Schmidt said.
Honda looks set for a rocky road ahead in Europe.
“There’s no way to solve this overnight; it will take years, so don’t expect a quick turnaround,” Schmidt said.