Topic: Honda slashes Ridgeline production plan

[Driver]

http://www.autoweek.com/news.cms?newsId=103486

Honda slashes Ridgeline production plan, blames soft sales on lack of incentives
JAMES B. TREECE | Automotive News
Posted Date: 10/31/05
TOKYO -- With Ridgeline sales starting out slower than expected, Honda Motor Co. is cutting production of the new pickup.

Honda is taking 3,000 units out of its January-March production plan. The full-year target was 50,000.

Honda CFO Satoshi Aoki revealed the plans to cut production during a press conference announcing Honda's earnings for the quarter ended Sept. 30.

The Ridgeline, Honda's first foray into the pickup segment, is built exclusively in Alliston, Ontario. The vehicle went on sale in March. Sales through September in the United States totaled 25,787.

Honda built 17,402 Ridgelines in the third quarter.

In an interview with Automotive News at the Tokyo Motor Show this month, Honda CEO Takeo Fukui blamed the soft sales on high U.S. incentives on light trucks.

He said Honda would not join the incentive wars to jump-start Ridgeline sales.

"We won't introduce any incentives," Fukui said. "We'll adjust our production."

Honda executives said they hope to lower overall incentive spending in the United States. But they conceded that Honda's spending has grown more rapidly than expected.

Hideki Okada, general manager of Honda's accounting division, said at the press conference that the carmaker hopes to trim U.S. incentive spending by about one-third in the October 2005-March 2006 fiscal second half compared with the previous six months.

But Honda also raised its forecast for incentive spending for the full fiscal year ending March 31. It now expects to spend between $990 million and $1 billion on incentives this fiscal year.

Last spring, Honda had projected incentive spending of $690 million. It then raised that forecast to $890 million in July.

Aoki said the company's worldwide operating profit in the quarter fell on higher incentive spending in the United States.

Honda's operating profits in the quarter declined 5.9 percent to 162.69 billion yen or about $1.44 billion at current exchange rates.

[Snowman]

"We won't introduce any incentives," Fukui said. "We'll adjust our production." 

Just like any company with profitability as a priority would do. This isn’t rocket science. I wonder why the Domestic automakers won’t adopt this concept.

[ovr50]

No wonder it's selling - it's not a real truck.....

[Bullet Blue]

 

[ovr50]

 

[G0dspd]

Still pretty good sale figures for a minivan .. eeuuh ... jeep ... eeuuh ... truck. 

[tortoise]

Slashes their production?  Sounds like hyperbole to me. They only reduced their yearly production by 6%.


 

[mjohnston39]

Wonder if we'll see a styling update sooner than later with the Ridgeline. Honda has some decent looking Ridgeline concepts at SEMA.

http://www.vtec.net/news/news-item?news_item_id=438109

Mike.

[Traum]

That conventional-looking grill easily looks 10000000x better than the piece of turd that is found on the current Ridgeline right now. I bet Honda would have won many more sales if the Ridgeline wasn't that ugly to begin with.

-Rick

[Snowman]

Vehicle sales for SUV’s and trucks are down for all automakers. This is a prudent business decision and nothing else. Get all the facts before passing judgment.

[ktm525]

Clean up the front end a little and offer me a nice taty diesel and it would be a serious contender for my next "truck".

[gta_driver]

"We won't introduce any incentives," Fukui said. "We'll adjust our production." 

Just like any company with profitability as a priority would do. This isn’t rocket science. I wonder why the Domestic automakers won’t adopt this concept.

Because in the past GM, Ford and Chrysler abetted by the CAW have been able to count on corporate welfare from both the province and the federal governments to help get it out of financial trouble. If a company requires taxpayers money to keep it afloat it shouldn't be in business.

[sirAQUAMAN64]

The SEMA concept actually looks good!

If you look at US pricing, you'd note that RidgeLine is severly overpriced in the US. In Canada it's the opposite situation, where pricing is rather attractive versus the competition - but there's no $6,000+ incentives on them here. Pick up any newspaper and you can get a Dodge Ram 1500 Quad Cab HEMI with polished 20" wheels for $28Gs advertised.

That's what the Japanese do. They adjust production and revise packaging - they don't drastically discount, which later has adverse affects on resale, market perception, questionable product value, etc.

RidgeLine only comes in one configuration - V6 Auto 4dr. And in the US a high price. But it's still a really smart (if odd looking) product.

[G0dspd]

The SEMA concepts are maybe more unique ... but they're not much better than the regular Ridgeline.  I hope for Honda that they update the look soon.  The only thing I like about the SEMA models is the tonneau cover (on the black one) ... I don't think there are to many of those available on the market these days.

Is Honda is trying to pull the same BS has Toyota with their truck?  The Tundra is more a truck than the Ridgeline will ever be but some don't consider it one of the big boys like the Nissan Titan.  So whenever you see a Tundra commercial, they always show a crew cab model with the TRD 4X4 package just to make it look bigger.  Like Toyota with the Tundra, Honda puts big tires and a few aftermarket ornaments on their truck to make them look more rugged. 

I'm not saying Honda is trying to make the Ridgeline a "real" truck ... but the same strategy could be helpful in NA.

[random006]

I just don't get the Ridgeline.  I also didn't get the Avalanche.  It is therefore no surprise to me that sales have suffered, even without any gas price considerations.

To my untutored eye, they are the same type of vehicle looking to fill the same niche.  Neither fish nor fowl, they both look too small to be a real pickup and too big to fit into the normal urban / suburban environment of most people.

Am I missing something of fundamental importance here?

It reminds me of a National Lampoon magazine description of golf:

If you want to take long walks, take long walks.
If you want to hit little balls with a stick, go hit little balls with a stick.
But there is no excuse for combining the two and putting the results on television!

[Shnak]

how can you say the Ridgeline is too small to be considered a truck when it is bigger than all the compact trucks (Ranger, Colorado/Canyon, Tacoma and Frontier) except maybe the Dakota... Aren't those trucks?

[ktm525]

I just don't get the Ridgeline.  I also didn't get the Avalanche.  It is therefore no surprise to me that sales have suffered, even without any gas price considerations.

To my untutored eye, they are the same type of vehicle looking to fill the same niche.  Neither fish nor fowl, they both look too small to be a real pickup and too big to fit into the normal urban / suburban environment of most people.

Am I missing something of fundamental importance here?

It reminds me of a National Lampoon magazine description of golf:

If you want to take long walks, take long walks.
If you want to hit little balls with a stick, go hit little balls with a stick.
But there is no excuse for combining the two and putting the results on television!

I think the Ridgeline approach is perfect. You see I need a truck with a bed just large enough to  accomodate a couple of dirtbikes. If it wasn't for the dirtbike requirement I would probably be in something like a Volvo XC70 or something. As I add to my family the passenger space is a growing requirement, the back seats must be able to handle child seats with the driver's seat adjusted for myself (6'2") . YThe vehicle must be able to do double duty as a secondary family hauler. I want all of the above in the smallest package I can find. I currently drive a Dakota 4WD Quad Cab but I could easily see myself driving a Ridgeline.

[mdxtasy]

I could see myself in a Ridgeline...I am sure it could replace the MDX in our family as well.  The approach is bang on.  Good V6 with decent power and good passenger space with suitable cargo capacity.  The Avalanche with the big V8 is a little too big for my needs.

[Arthur Dent]

"We won't introduce any incentives," Fukui said. "We'll adjust our production." 

Just like any company with profitability as a priority would do. This isn’t rocket science. I wonder why the Domestic automakers won’t adopt this concept.

with their agreements with the labour unions there labour costs are essentially fixed. Ie Bubba gets paid full salary if he's assembling cars or not.

[G0dspd]

I wouldn't compare a Avalanche with a Ridgeline IMO ... maybe with a Ford Explorer Sport Trac.  Have you ever drove an avalanche ... it's a beast.  It's huge and you need a ladder to get in the trunk hehe  ... you also need your own tanker to follow you