Honda sales are down 17 percent this year over last in Japan.

Yuzo Yamaguchi, reports in Automotive News that it's a deliberate strategy on Honda's part to make fewer cars - but make more money doing it.

Takeo Fukui, Honda's newly-minted CEO was quoted as saying, "Rather than sticking to a sales goal, we should make our customers happy. Then, sales should follow."

Now you folks who have had an up hill battle with Honda on honoring S2000 repairs have some ammo!

 

Hmmmmmmmmmmmm...............

How does lowering your volume increase your margin?

This brings to mind something about both sides of someones mouth.

 

I think it's the opposite of the " we lose money on every unit but we'll make it up in volume" philosophy.

 

Lower sales can result in higher profit if production is cut causing causing a decrease in supply thus causing the sales price per unit to go up. If this is what Honda is thinking, it could be a risky policy. It is based on the assumption that demand for Honda vehicles faces a relatively inelastic demand curve. I'm not so sure that is the case. Especially today. There are lots of other quality cars out there. The Accord is no longer alone, and Honda can't rely on specialty cars like the S2000 for much profit (relatively speaking).

As far as talking out of both sides of the mouth, that is absolutely correct. Throughout the history of the automotive industry sales has always talked one way and service the other.

As far as it helping those with warranty problems, I don't think so. The problems are with American Honda and not Honda Japan. I doubt that one will override the other.

 

I don't know how that might affect American Honda, but it sounds like they're going to try and make their customer service on par with companies like Lexus(sorry Joe, no MB's in my family), where you walk away happy from having your car serviced and knowing that they will fix anything they may have missed without question, thus bringing back more customers when new models come out, and guaranteeing future sales. Sounds like a good idea, even better if they bring it over here. Just my $.02.

 

I think, it is exactly what they're doing with '04 S. They were once do it for pleasure, now they are going for the money!

 

Nothing wrong with that. That's what companies do!

I heard an interesting report on NPR yesterday that says that the average profit made by American car companies on each vehicle sold is $700. The average profit per vehicle sold by Japanese companies is double, at a bit over $1,400

So, they are not only building better cars than we do (for the most part) but doing it smarter and making a higher profit at it.

 

Rather than pushing for total volume, Honda is saying they are pushing for more efficient production. Yes, you can make more on fewer cars if you are more efficient at doing it. Sometimes higher volume means you are trying to do more than your plant was designed to handle.

 

[QUOTE]Originally posted by Legal Bill
[B]Rather than pushing for total volume, Honda is saying they are pushing for more efficient production.

 

just a point, look how many cars the big 3 put out, and most of them suck...... in my humble opinion