Going Forward, In Reverse: How Toyota Made Its Comeback, and Honda Hasn't

By Blake Z. Rong | May 08, 2012
When Toyota had that niggling little kerfuffle a few years ago, what with its cars accelerating its occupants without their knowledge, analysts and pundits wondered out loud when, or if, Toyota would gain its mojo back. Turns out, the answer is now. Toyota sales were up 13.8 percent in April, compared to last year, and Toyota sold 6,000 more Camrys in that same month than in 2011. Some analysts point out that it took about 4 months for Toyota to bounce back, from both the spate of recalls as well as the devastating earthquake and tsunami in Japan last March. A recall of Toyota's magnitude might have destroyed a lesser company. But, being Toyota, the juggernaut can seemingly do no wrong. On the other hand, Honda never enjoyed such a recall. Yet, its sales have been floundering recently—it suffered nowhere near the humiliating publicity as Toyota, but sales have dropped for 10 straight months, and overall by two percent from last April. Even with the national consciousness learning to accept $4/gallon gasoline, Honda's hybrids haven't been selling well. What's going on at the big H? Should Honda suffer through its own recall to rejuvenate its own motivation? Oh wait, it already has its own share of recall problems.
How did Toyota regain its customers? It launched a new Camry, which despite its problems is practically ingrained in the American spirit, as quintessential to the nation's well-being as apple pie and a warm glass of milk before bedtime. Two new Prius models proved to be popular, efficient and well-priced. In fact, Prius sales doubled in April 2012 compared to April of last year, though Toyota didn't specify if it included all three models. "Any way you look at it, Toyota, Lexus and Scion dealers outperformed the industry," said Robert Carter, Vice President of the Toyota division. "April was an excellent month for Toyota and a good month for the industry. We are ordering more Camrys and [the factory] is able to build them. We are adding overall volume." Industry analysts say that the acceleration recall has been pushed out of mind of most buyers; as a result, Toyota is actually attracting new customers instead of appealing to its typically loyal fanbase. Honda claims that its sales in April, 2011 were up 10 percent from 2010, and the figures seem to indicate this. Yet Honda hasn't built up its sales base as quickly as Toyota. Compared to last year, its April sales dropped by 3 percent. Part of the reason is that Honda's production was more affected by the tsunami than Toyota, forcing it to delay introduction of the 2012 Civic; Toyota was able to recover its assembly lines quicker. Yet both companies build a majority of their products in North America. And both companies are pushing incentives aggressively, with Toyota spending more than Honda on rebates and special lease rates. But most importantly, Honda's new car lineup hasn't been compelling. The Accord is aging, the Civic was released already in need of a frantic update, and the Fit, CR-Z, and Insight have lost their luster. A new Accord is in the pipeline for release this fall, and the Civic should be getting an update soon as well. Not too far behind is the Pilot, which is in its fifth production year. One of the bright spots in the Honda lineup? The CR-V, which is all-new this year, proving that the formula for success is to keep the new-and-shiny in the showrooms. Source: Automotive News