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Honda has been at the cutting edge of the automotive industry for over 55 years. They were the innovators, the pioneers who – along with Toyota – Introduced the first economy cars to America. When Detroit was making gas guzzlers in the 70’s, Honda offered the Honda Civic – the first vehicle to meet the strict emissions standards of the new U.S. Clean Air Act. The Civic was reliable, affordable, and cute.

In 1981, Honda developed the world’s first car navigation system – the Honda Electro Gyrocator – that displayed current locations on a map.

In 2002, The Honda FCX was first to receive U.S. government certification as a fuel cell vehicle. The FCX had 2 hydrogen containers and was one of the first zero-emission cars in the world.

Honda reached a milestone in 2016 when they sold 100 million vehicles worldwide. Everything seemed to be going their way. So, what happened? 

Honda Downfall

The Takata airbag recall was a big bump in the road in 2019 when they recalled 1.2 million Honda and Acura vehicles.

But the supply chain crisis hit Honda hard – and they are still recovering from it. While all car manufacturers got clobbered during the COVID pandemic, Honda took it on the chin. Their North American sales are down over 40 percent from 2021.

In July 2022, Honda delivered 47.4 percent fewer vehicles than it did in July 2021. Year to date, Honda’s total sales are down 40.4 percent. Honda sold 135,542 cars in July of last year. Today, that number is just 71,235, and profits are down as a result. The company’s net income has dropped 33 percent to $1.09 billion year-over-year.

On August 25, Honda said it was going to slash production plans by up to 40% due to persistent supply chain and logistical issues. This came after Japanese automakers said chip shortages that caused repeated production cutbacks were easing.

Honda’s CFO Kohei Takeuchi seemed unfazed. He told Automotive News that inflation and rising interest rates will “eventually have an impact on the economy,” which may affect demand in the future. That’s not what he’s focused on right now. He claims to be focusing on delivering vehicles to customers rather than taking immediate measures to counteract a recession.

One comment on automotive website The Drive caught our eye: “Honda, like Nissan used to set the bar on fun, stylish, and affordable. Honda has been making bland and ugly cars for a while. They need to get back to their roots.” We think this sums up Honda’s overall problem perfectly.

Honda’s first BEV (Battery Electric Vehicle) won’t come out until 2024, The Honda Prologue is a full-size SUV with a $45K starting price. Even though they were pioneers in alternative energy, they were late to enter the EV game.

Honda has been slow out of the gate for years. In our opinion, hubris and bureaucracy has stifled innovation and contributed to delivery slowdowns. Plus, we think a shakeup in their R&D design center will help them reinvigorate their lineup and bring back the Honda magic again.

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