Honda stops producing in Europe
The reasons for this about-face? What’s the point of designing cars only for the Old Continent, when Honda has been losing money there in recent years? Its sales are also in sharp decline. Didn’t Honda sell just 5,300 cars last year in France, against 18,000 at the end of the 1990s? And 68,000 only in Europe (EU, Great Britain, Switzerland, Norway), against targets of 300,000? Honda had managed to sell 250,000 vehicles in the mid-2000s. For a manufacturer that produced 4.1 million units annually last year, Europe is a drop of water. Honda manufactured 1.58 million units in China in 2021, 1.3 million in North America, 615,600 in Japan.
Why this structural weakness in Europe? The Hondas remained expensive models. The firm arrived late on diesels and launched new models sparingly. It particularly lacked small affordable vehicles in the Renault Clio, Peugeot 208, Volkswagen Polo niche. Honda has suddenly suffered the full force of competition from new players, such as the Korean brands Hyundai and Kia, which, paradoxically, claim loud and clear that they produce in Europe (in Slovakia and the Czech Republic). Honda sells eleven times less than its compatriot Toyota in Europe, 3.5 times less than Nissan. But also 7.5 times less than Hyundai, 7.3 times less than Kia. It is the smallest Japanese on the Old Continent, apart from Subaru (associated with Toyota).
Now Global Products
Honda therefore intends to refocus on its most profitable markets, China and the United States. And offer “for the first time a global product in Europe, China, the United States”, underlines Pierre Guignot. The director of Honda Auto France adds: “nothing will be produced in Europe anymore”. Moreover, this globalization is not necessarily a bad thing, because “the markets are converging”, notes Jean-Alexis Bidet, marketing director of Honda Auto France. After testing the new Civic for some 200 kilometers in the Sierra de Guadarrama around Madrid, it is clear that this hybrid Civic (from 30,000 euros) is an excellent car, well finished, technically sophisticated, and whose engine is guaranteed for ten years, proof of the legendary reliability of the brand’s cars! But its body, very long for a compact (4.55 meters long, 20 centimeters longer than a Peugeot 308), will make it marginal in this segment. This is the problem of world cars.
Honda is planning several new products for 2023: the ZRV, a compact SUV already launched in the United States, and the e:Ny1, a small electric SUV developed for China and produced there. A new CRV SUV, larger than the ZRV, is also planned for Europe in hybrid and plug-in hybrid, a model designed in particular for North America. Note that Honda marketing has a particular knack for naming vehicles by acronyms that are unpronounceable and difficult to memorize! Thirty electric models should see the light of day before 2035, mainly developed for China and produced in two new factories there!
The European models will come for a good part from the former Middle Empire. Honda and Sony also announced last March their intention to form a joint venture to develop and sell high value-added battery electric vehicles and jointly provide mobility services. Honda is not just a car manufacturer. He is also the world number one in motorcycling. In 2021, the group, which last year (April 1, 2021-March 31, 2022) posted an operating margin of 5%, sold seven times more motorcycles in France than cars, but also 25 times more lawn mowers. grass!
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