Honda’s Troubles Multiply with Thailand Floods

October 31st, 2011

Flooded Hondas

Maybe you’ve been watching the photos coming out of Thailand. This one is of Honda’s underwater assembly plant near Bangkok, which is likely to be out of commission for up to 6 months, affecting 3 percent of global output.

And who can forget the pictures from the earthquake/tsunami disaster in March that humbled Honda big-time? Plus the strong yen, which has contributed to Honda’s recent announcement of quarterly profit falling 56 percent. U.S. sales dropped 22.3 percent, and revenue from nearly all regions was down.

The company is really taking it on the chin—and this at a time when U.S. auto sales are predicted to rise. Other companies, like Toyota, have also been affected by the floods, and there are all kinds of supply chain shortages.

We’ve written before about Honda’s 2.5 million recalls and how Consumer Reports dissed the Civic. Now the bad press about the car has forced Honda to move up its efforts to redo the cheapened Civic, to sometime in 2013. By which time, the damage may have multiplied.

2012 Honda CR-VWe also have a few pictures of the new, proudly hailed, fourth-generation CR-V, showing in Los Angeles next month. There aren’t many details, except for a few pix here. AutoTribute does tell us that the car will be bigger than the current one, probably with a third row of seats. Oh boy.

As to appearance, I don’t see much of an improvement on the present car, and so it fits right in with most of Honda’s other offerings. That is to say, its proportions are off, and it is still Honda-homely. The concept, as we discussed here, was a bit better.

Just this morning, Honda took the unusual step of withdrawing its annual earnings guidance (a misguided practice to keep investors “informed” and boost the stock). What that means, obviously, is that the company is uncertain about its financial prospects. And that could be an understatement.

What can Honda do, besides its Civic redesign, to get back in the good graces of car buyers?

—jgoods

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  1. Randy
    November 5th, 2011 at 06:15 | #1

    Gosh, when the USA car companies are down and reeling, you guys blame it on the execs and union workers (mainly the union workers) and now you’re playing the boo hoo violin for a Japanese car maker who enjoys unfair trade protection in its home country and for some reason chooses to build a major plant (to take advantage of lower labor costs) in Thailand on a flood plain. Sorry, but aside from the tsunami, a terrible tragedy for all Japan, most of Hondas troubles are of its own making.

  1. November 7th, 2011 at 11:46 | #1