Is Honda the true juggernaut in the auto world?

All we’ve been hearing for years is Toyota this, Toyota that. Toyota will beat out GM as the world’s #1 automaker, then they’ll probably take over the world. Quite frankly, I’m sick of hearing about Toyota. Toyota has had numerous quality problems as of late, and if they continue, they could permanently harm Toyota’s “bulletproof” reputation. America has a long memory when it comes to reliability – just look at GM. They made garbage in the 80’s, and it still haunts them today, regardless of the fact that their new cars are very reliable.

Toyota’s cross-town ( cross-country? ) rival, Honda, is on a much clearer path. Honda has no delusions of world domination. They don’t have even the slightest inclination to beat GM, or even Ford. They don’t have any interest in getting near the top in sales volume – it’s not their game to play. Honda is content to produce a fairly limited number of incredibly reliable, high quality vehicles and sell them at a premium.

Compare, for a moment, the prices that these vehicles usually sell for. Toyotas, with the exception of their hybrid models, generally sell for right around invoice, give or take. Hondas sell for much closer to sticker, and sometimes above. Both the Honda Fit and the Honda Civic are still in extremely short supply and high demand. While the Yaris is doing very well for Toyota, the Corolla is rather uninspiring.

I see a coming shift in the automotive world pecking order. I see GM falling from it’s top spot, of course. That will come as no surprise to anyone. Toyota will of course supplant them. However, Toyota’s recent quality concerns will continue to plague them, and their time atop the world will be short compared to GM. If automotive companies are to be successful in the future, I see them modeling themselves more after Honda than Toyota. As a result, we’re likely to see more brands, but smaller volume in each brand. What does that mean to you, the consumer? More variety and higher quality. That’s not so bad.

Published on October 12, 2006 in Ponderings

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