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Honda falls to fifth place in domestic sales. New "Fit" may be the only model that could save the company.

10, 29. 2007

   Honda Motor Co. slipped to the fifth place from the third place where it had always remained in the sales in Japan of all cars (ordinary and mini vehicles) in the first half (April-Sept.) of fiscal 2007. It was surpassed in the sales race by Suzuki Motor Co. and Daihatsu Motor Co. Honda suffered the sales decline in terms of the total number of units sold due mainly to a sharp decrease in the sales of mini cars to less than four thirds from the first half of the previous fiscal year. Hope is now placed on the new model of Fit that will be put on the market in October 2007 to lever up the sales. The domestic sales of Honda have long been said to fluctuate widely depending on the sales power of its products. Though the Fit is ridiculed for its not giving the impression of sense of stability, high hope is still placed on the new model. As it is becoming difficult to introduce a hit car on the Japanese market, too much expectation may have to be avoided.

Sluggish sales used to be Nissan, but now it's Honda.

Sales of new model of Fit will be watched (The photo shows the current model.)
Sales of new model of Fit will be watched (The photo shows the current model.)

   The new car sales during the first half of the current fiscal year were extremely sluggish, dipping below the 2.5-million-unit level for the first time in 27 years. Among the carmakers, Honda showed conspicuously slow sales. Its sales of ordinary cars fell by 7.9% to 181,629 units and mini cars, by 26.2% to 110,257 units. Its total sales thus went down by 15.8% to 291,886 units, allowing Suzuki to go to a higher place with 292,466 units and Daihatsu with 292,466 units.

   The name of Nissan Motor Co. had been mentioned first in the past as the carmaker which faced sales difficulty. By introducing the new SUV Dualis and Extrail and by achieving active sales of the minivan Serena, however, Nissan sales hare now turning to an uptrend. Honda seems now to be gradually falling behind Nissan in sales.

   Does Honda have a trump to play to push up its sales again? On this question, the Fit, which will go under a full model change in the middle of this month, comes to the mind of everybody. After being introduced in 2001, the Fit put an end to the best-selling run of the Corolla, that had continued for 33 consecutive years. The introduction of the Fit new model is thus considered as this year's biggest event in the domestic auto industry.

   The sluggish sale of the Honda mini cars this year has something to do with the forthcoming introduction of the new Fit. The Honda dealers, which number more than 2,300 throughout the country, are making their utmost efforts to get orders for the new Fit cars by calling on the users of as much as 900,000 units of the current Fit cars.

It may be difficult to become a smash hit as before.

   It is not only the new models. As the number of the new models to be distributed among the dealers are decided depending on the sales results of the current models. They are thus compelled to make special efforts to sell the current models. The sales of the current models of the Fit during the first half reached 40,064 units, dipping only 7% on year, to level with the ordinary cars which were in the third place in the sales order. No matter what will be the outcome, this year will be the year of the Fit. As for the last year, it was the year of mini cars as all the dealers began dealing with mini cars and the Zest cars came into the play giving much hope.

   It is not a bad idea to push up sales by picking one particular model to act as an axis each year. It is difficult to stabilized the sales if most of the 20 different types of merchandises are dormant. There is not much room any more for producing a hit model on the domestic market which is tend to be shrinking. The Fit was the last car of which the sales exceeded 200,000 units when it reached 250,790 units in 2002.

   The executives of Honda show confidence that the Fit came out to be a fine car. They say at the same time, however, that it might be difficult for the new model of the car to become a big hit as it did when it was introduced before. A top executive of the company commented that the Japanese market "is different" to the company which is good at selling North America and other markets in the world, such as China and Europe. The sales result of the new model of the Fit will determine Honda's skill of handling the domestic market.

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