Less-is-more philosophy works for light trucks, too
Honda gains entry with the Passport, takes some strange trips for the Odyssey and arrives with the CR-V
To wet its feet in the burgeoning U.S. truck market, Honda rebadged the Isuzu Rodeo SUV and sold it as the Honda Passport starting in 1994.
Dick Colliver, American Honda's sales chief, who arrived at Honda in 1993, was horrified to learn that Honda was putting its name on the Isuzu vehicle.
The Rodeo "didn't have the quality and the image" of a Honda car, says Colliver. "Fortunately, we had to keep it for only three years."
But the Passport episode revealed a side of Honda that has helped the automaker thrive over the years: Proceed carefully, do your homework and stay true to Honda's less-is-more operating and brand philosophy.
Significance: Reluctant at first to migrate from its car roots, Honda developed successful light trucks such as the Odyssey minivan and CR-V and Pilot crossovers. And it resisted calls by dealers to build big pickups, a segment that soured for Toyota and Nissan.
Watching moms in minivans
While it sold the Passport, Honda started a long and determined effort to win its share of the light-truck market. Eventually it did just that with such hot vehicles as the CR-V SUV and Odyssey minivan.
After the Passport, Honda decided its first light truck would be a minivan. Chrysler and Dodge models, catering to the heart of America's family-vehicle market, dominated the large and profitable segment.
The original 1995 Odyssey was "a gussied up station wagon" designed for the Japanese market, says Kurt Antonius, spokesman for American Honda.
The second-generation Odyssey, designed jointly in the United States and Japan, involved research that almost got Honda employees arrested, remembers Dan Bonawitz, who retired recently as vice president of corporate planning and logistics at American Honda.
Honda employees staked out elementary schools and watched moms loading their kids. Parents complained, and the police came by.
"We showed the police business cards and badges that we worked for Honda and told them we were watching parents and how they used the vehicles," says Bonawitz. Then they went to a different school.
The research paid off. Sales of the Odyssey shot from 20,819 in 1998 to 77,801 in 1999.
Honda hit the jackpot with the launch of the 1997 CR-V SUV. Smaller than a traditional SUV and with a four-cylinder engine, the CR-V helped create a new segment.
"All the other SUVs were big honking V-6 and V-8 vehicles," Antonius says.
Initially, American Honda executives were leery of the CR-V, which was designed for Japan. "It looked very light-duty," says Bonawitz. "We didn't think it would sell in the U.S."
But in 2007, Honda sold a hefty 219,160 CR-Vs in the United States. "I'm happy to say we were wrong," Bonawitz says.
Dealers were still clamoring for a bigger pickup, he says. He argued "the world doesn't need another full-sized pickup. Ford and Chevy and GMC do that well."
No big pickup
So Honda developed the Ridgeline, launched in 2005, a pickup with Honda characteristics. Built with a modest budget on a modified Odyssey platform, the Ridgeline seats five and has a large storage compartment in the cargo bed.
Says Mark Hennigan, general manager of Gunn Honda in San Antonio: "The H on the hood is a big part of Honda being able to get into the truck market."
Sales of the Ridgeline have been disappointing. But Hennigan says the pickup does well at his store, partly because many of his salesmen own Ridgelines. Honda's reputation carried over from the car market, he says.
In 2005, its first year on the market, Honda sold 42,593 Ridgelines. In a soft pickup market, Honda sold 33,875 last year, down from 42,795 in 2007.
But Honda avoided a big mistake made by Toyota and Nissan: building a full-sized pickup. A large low-mpg pickup, requiring a huge, risky investment, was just too removed from the Honda Way.