|
 Nissan, thanks to the launch of models that are getting high marks
for styling, its wider range of vehicles and aggressive discounting,
is catching up with Honda. In the next couple of years it could
easily pass its rival in U.S. car sales for the first time since
1987.
It isn’t hiding its ambitions. "I'm sure that we will overtake
Honda,” said Jose Munoz, the chairman of Nissan North America. ”How
long is it going to take us? Time will tell, but it's going to
happen."
While he says the company isn’t obsessed with leapfrogging Honda,
Munoz is targeting a 10 percent share of the U.S. market by 2016.
Its share in the first seven months of this year was 8.6 percent, up
from 7.4 percent in 2009. Honda’s share, meanwhile, has slipped to
9.1 percent, the lowest since 2006, from a peak of 11 percent in
2009. Toyota <7203.T> currently has about 15 percent of the market.
Honda <7267.T> had been the trend setter. The first Japanese company
to build cars in the U.S., it built its sales and manufacturing
footprint so rapidly across the United States that Honda executives
had a term for it - "crazy speed." the company gained a reputation
for high quality, and went out to consumers with slogans like “We
Make it Simple” and “Honda: The Power of Dreams.”
"DROP-DEAD GORGEOUS"
It "used to stand for high quality and refinement," observes
longtime auto industry consultant Maryann Keller. "Now, I'm not sure
if you ask the average consumer what does Honda stand for, they
could tell you."
Honda may have redesigned its best-selling midsize Accord and
addressed complaints about its popular Civic compact, but neither
model is considered a style-setter.
"The cars are high quality, they're very reliable, but not
necessarily exciting," says Dave Sargent, vice president, global
automotive, at research firm J.D. Power. Still, he adds, "the image
Honda has for quality and reliability is notably better" than
Nissan’s.
However, Honda argues Keller "can no longer live on the old quality
mantra. It's not enough because everybody's got pretty good
quality."
Nissan was once regarded as stodgy with occasional quirky moments.
But driven by CEO Carlos Ghosn and global design boss Shiro
Nakamura, Nissan has sharpened its emphasis on distinctive, yet
appealing design, while crafting a more cohesive identity for the
company's mainstream Nissan and premium Infiniti brands, pegged
largely to sporting performance.
"It all comes down to product and styling," says Bob Lutz, former
vice chairman and head of global product development at General
Motors Co. Nissan, adds Lutz, "has some drop-dead gorgeous cars,"
including the increasingly popular Altima Sedan, a style leader in
the midsize sector.
[to top of second column] |
Honda remains heavily dependent on the Accord, the Civic and the
segment-leading CR-V crossover, which account for 69 percent of
Honda's U.S. sales this year.
In contrast, Nissan's top three sellers, the Altima, the compact
Sentra and the crossover Rogue, make up 52 percent of its U.S.
sales.
That dovetails with Nissan's broader strategy of diversification,
with a product range that numbers 27 models in the U.S., compared
with 16 for Honda.
INCENTIVES
The outcome of the current sales tug-of-war is critical for both
companies, and not just for bragging rights. The North American
market, including Canada, accounted for 41 percent of Honda's global
revenue in the April-June quarter and nearly 49 percent at Nissan.
Honda claims Nissan, whose sales have risen 13 percent so far this
year, has been goosing its U.S. market share with lower sticker
prices, hefty incentives and discounted sales to fleet customers.
"We don't pursue a lot of short-term sales tactics to try to gain
market share," said Jeff Conrad, senior vice president and general
manager of American Honda Motor Co's Honda Division.
According to research firm TrueCar.com, Nissan's per-vehicle
incentives in the first half of this year dipped slightly to average
$2,497. Honda's incentives jumped 26 percent over the same period to
$1,969, but were still well below Nissan's average.
Honda also held firm on pricing and margins, with its per-vehicle
transaction prices in the first half averaging $27,093, according to
TrueCar.com, while Nissan's average prices plunged 7 percent to
$26,150.
The numbers suggest that Nissan's final push to overtake Honda in
the U.S. could be costly, depending on how much profit Ghosn and his
executive team are willing to sacrifice to attain that goal.
(Reporting by Bernie Woodall, Ben Klayman and Paul Lienert in
Detroit; Editing by Martin Howell)
[© 2014 Thomson Reuters. All rights
reserved.] Copyright
2014 Reuters. All rights reserved. This material may not be
published, broadcast, rewritten or redistributed. |
