What of Honda, once found manufacturing in Swindon, selling more than 100,000 cars and offering a line-up as diverse as could be – from the Honda NSX, S2000 and Type R performance cars to the quirky Insight and Legend, the wilfully different Honda Civic and that quintessential head-over- heart purchase beloved by pensioners, the Honda Jazz?
From the heady heights of 2007, when it topped out in volume terms, skip to last year, when it registered a market share of around 1.6% and 26,000 cars (albeit amid a pandemic and a chip crisis) with just four mainstream models on sale. It reads like a spectacular collapse, last year put into yet sharper focus by the fact that even Mitsubishi outperformed it prior to shutting up shop. But while the volume and market share figures have tanked, Honda and its dealers have reached somewhere almost unknown when the charts were at their highest points: profit.
In that regard, Honda now finds itself on the front foot, its own crisis having begun several years before the industry’s wider one and in turn its corrective actions.
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It was focusing on profits over volume as far back as 2014 and as early as 2018 was beginning to cut its dealer network so that they too could be profitable with fewer sales. From outside, it looked like a company in retreat; in today’s context, it looks incredibly shrewd.
The results have been impressive. From 2013 to 2019, Honda dealers’ profit margins doubled to 1.45%, a figure well above average in this famously difficult industry. This year, with supply constrained but prices higher, that figure is set to hit 3.3%. Other makers are enjoying similar booms, it must be said, but Honda’s is well ahead of the curve.
So far this year, Honda is the 21st-largest manufacturer by market share but the sixth-fastest- growing, behind Kia, MG, Hyundai, Toyota and Fiat. By retail sales volume (the most profitable), it’s 16th- largest. In the alternative fuel market (hybrid by any other name), it’s seventh- largest, while its market share growth is eclipsed only by Ford, Volkswagen, Kia and Renault. For retail alternative fuel sales, it’s second overall and in terms of growth, behind Toyota.
In turn, Honda UK is in better shape than for a long time. Exact figures are hard to come by, but the graph that’s out there shows heavy losses becoming a profit last year. By pushing less, it appears to finally have found a route to sustainable success.
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