Why hasn't Honda dominated Toyota?

Losing its market share

In the wake of Toyota's recall crisis, you'd have thought that other Japanese car companies, such as Honda, would have cleaned up especially with their main competitor frantically scrambling to regain credibility and escape indictment in the US.

However Honda's share in the US car market has actually fallen for the first time in a decade with is 1.5 percent share in the first quarter of 2009 falling to 10.1 percent in the same period this year. It is not the same across the board however. Other Japanese car firms have seen growth - Nissan Motor is up to nine percent up from 7.9 percent, and Hyundai Motor is up to 4.4 percent from 4.2 percent - so what happened to Honda?

Image problem?

There have been some in the car industry that have surmised that Honda's misfortune is down to several reasons. Firstly, not fully capitalising on Toyota's misfortune by issuing their own recall for almost a million cars over an 'airbag problem', but also to their cars' image slipping.

Speaking to BusinessWeek, Jessica Caldwell, a senior analyst at car shopping site Edmunds.com, said that Honda "has lost its mojo with new model launches."

Indeed, several of Honda's new models have been described as "pale" compared to other companies and as such, their reputation for being the "Japanese BMW" has faded. Indeed, Honda's version of the Toyota Prius, the Insight, has had a rocky release with only 5000 being bought in the US despite being billed as a 'less expensive alternative to the Prius'. Instead the Prius, despite its recent 'brake scandal', has maintained steady sales while the Ford Fusion has seen strong sales despite costing 35 percent more yet having the same miage as the Insight.

While Honda has stated that the company is still profitable and remains "focused on providing reliable, safe, efficient cars", the fact that their market-share has continued to slide cannot be avoided.

In comparison, Toyota has fought back against their current scandal and has seen an unexpected rise in sales.

Relevant articles:

Hopes rise in Japan | Japan to trial electric filling stations | The great Japanese car recall

Timon Singh

Timon Singh is a graduate of Liverpool University where he received a degree in Social and Economic History. He has previously worked for BBC Magazines on BBC Who Do You Think You Are? Magazine, the publication for the popular genealogy show.

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