Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Entry archive:

2010 Honda Civic Sedan (Wes Allison/Honda)
2010 Honda Civic Sedan (Wes Allison/Honda)

Driving It Home

Honda delays new Civic launch Add to ...

Word out of Los Angeles is that Honda will delay launching an all-new Civic until next year. The current Civic had its debut in September 2005, so an all-new Civic compact had been due this fall.

By industry standards, the Civic is nearly ancient. Sure, the Civic has been Canada's best-selling car nearly forever, and it remains an excellent little runabout - reliable, safe, good fuel economy and quite agile handling. But the fact is, the Civic is under siege this year and things will not get easier with a new Ford Focus due in January and a new Hyundai Elantra due within the year.

In fact, the Civic has been in a battle to stay on top for quite a while. Honda through the end of March had a lead of just 32 Civics over the No. 2 seller in Canada, the Mazda3 - 11,794 Civics to 11,762 Mazda3s. Civic sales are up 9.1 per cent on the year, but Mazda3 sales have jumped 21.4 per cent in 2009, and 33.1 per cent in March alone. Civic sales last year were down 13.5 per cent in 2009 - compared to the Toyota Corolla down just 6.6 per cent, Mazda3 down 6.7 per cent and Hyundai Elantra up 159.6 per cent.

It may very well be that various market issues and regulatory challenges have sideswiped Civic development. But Honda is also saving money by delaying the Civic. It appears Honda is willing to trade a few Civic sales for a fatter bottom line. To some, that might smack of short-term thinking.

For the record, Honda nearly doubled its profit last year to $2.9 billion after slashing expenses to offset a drop in sales. Honda cut production, eliminated workers and even asked senior engineers to take pay cuts. In the end, while revenue dropped 14 per cent to $92 billion, profits doubled (all figures in U.S. dollars.) And for the current fiscal year, Honda is expecting a 27 per cent rise in profit to $3.7 billion.

Companies should focus on profitability, but investments in new models are also important, so the Civic delay bears watching. What we know for sure is this: the very most senior brass at Honda are feeling grumpy. Last month at the Beijing auto show, Honda president Takanobu Ito said his company has grown "complacent" and needs to refocus on better products and stronger marketing.

"I'm not satisfied," Ito said in a report from www.just-auto.com. Ito has challenged his engineers to speed up the launch of the next-generation Honda Insight hybrid, which has been a major sales disappointment. And reports say he is rolling out a new hybrid strategy for larger vehicles.

But, "The biggest problem is we're not selling the value of our products," he said. "We have to improve the performance of our products as well."

But not this year, not for the Civic.

Follow on Twitter: @catocarguy

 

In the know

Most popular video »

Highlights

More from The Globe and Mail

Most Popular Stories