Okay, 2008 is closing, and even though Honda posts record breaking profit by the middle of 2008, September came and hell along with the winter autumn breeze. Why hell? Hell… Everything plummet since September, everything that went up suddenly dropping like it was, I dunno, want to crack some joke but I think it’s futile anyway. Anyway…
When somebody wrote “The situation is worsening every day in all regions.” in their publicized company report… Then, probably it is. For 2009, Honda forecasts a drop in automobile and power equipment demands, but cited an increase in motorcycle demand. Well, it is given, when you can’t afford a car, you will buy a motorcycle (if you live in SE Asia).
“Unit sales forecasts are: motorcycles; 10.3 million units (+10.5%), automobiles; 3.65 million units (-7%), power products; 5.185 million units (-14.4%).”
The forecasts seems… Rather safe and heart lightening, however, when we look at the direction Honda is taking, I’m not so sure anymore. “
“• Toward this end, Honda will closely monitor the marketplace and then carefully determine what actions need to be taken. Once decisions are made, Honda will take quick action as the company realizes the situation is very urgent and a slight delay in making management decisions could be critical.
• Based on this understanding of the situation, bonuses for directors, corporate auditors and operating officers will be reassessed based on the business results of the current fiscal year ending March 31, 2009. In addition, monthly remuneration of directors, corporate auditors and operating officers will be cut by 10% for all directors starting January 2009.” Things are tough when the higher ups bonuses are reassessed based on the business results.”
Tough, because if the situation doesn’t improve, it’s up to the higher ups effort to maintain their bonuses, and in this uncertain economy condition… Well it’s safe to assume that Honda just want to cut its spending.
Okay, so enough of the preliminary, let’s just cut into the meaty part. So…
The darker side…
- Honda is canceling the NSX project, along with it, the V10 and V8 engine destined to go to Acura.
- As such, Acura launch in Japan is postponed.
- So does medium to large diesel engines.
- Not to mention quitting F1 and AMA.
The lighter side…
- Honda will concentrate on small sized cars as forecasted will be the top selling model of 2009. Meaning no more waiting for the Fit on the dealers!
- Hybrids are go, CR-Z is confirmed for 2010, and Insight V2 will be available early next year.
- Focusing on small cars, Honda will introduce small size diesels and an unnamed small car positioned below the Fit/Jazz.
- Honda will make available full electric scooter in 2 years time.
The Acura homeward bound cancellation is quite a shocker… But considering that it will take much more effort of time and money to introduce and maintain two separate brand, Honda best bet is just to keep Acura where it already established its business. When things are better, you can be sure Honda is going to take Acura home!
The NSX cancellation means a lot for everybody, Honda own NSX that races in SuperGT needs replacement badly… It’s the only naturally aspirated small block V6 on the grid. Fighting with the likes of large bore V8s of Toyota and super turbos of Nissan makes an easy opponent of Honda… Although the NSX is giving Toyota and Nissan a run for their money. NSX might not dominates anymore, but the extra decade old NSX still slots in on the top 5 at SuperGT… And sometimes manage a podium finish, not bad at all.
The V8 that is planned to go to Acura is another question mark. I would say Honda already have a blueprint for the engine, but just doesn’t want to produce it in quantity. Remembering the fact that new technology = retooling cost, and cost is the keyword that everybody is trying to avoid next year. Oh well, in the coming tough times, it’s good enough that people still buys a car.
One of the biggest interesting aspect of the year end report speech is the introduction of an unnamed small car that will be positioned below the Fit/Jazz. Is it the Life? Or better yet, Zest Spark? If it is, why wait 3 years? 3 years is quite a long time, the global economy slowdown might as well be relieved by then… Well, or perhaps Honda is waiting for its Chinese-partnership to bear fruits? The Li-Nian concept car is mighty fine… I wouldn’t mind driving a Chinese made Honda.
The all new Honda Zest Spark… Not released yet
All in all, Honda is bracing for a tougher times ahead, and there nothing to better close this post than taking it directly from the big man himself…
“Honda is a company driven to achieve continuous growth by the dreams and passions of each Honda associate. Especially when the company faces difficult times, each associate will maintain a high level of initiative and continue challenging.”
We will always challenge the future Fukui-san, we will always.
Official Honda CEO year end speech