American Honda's John Mendel discussed cars and goals recently with West Coast Editor Mark Rechtin.
Q. Is American Honda moving its 3,000 headquarters employees to Ohio?
A. We're not moving to Ohio. Honda's auto operations is not moving to Ohio. Auto sales is not moving to Ohio.
What's the advantage of moving? There has to be tangible ROI. You've seen organizations move from Detroit to California and from California to the Midwest, thinking it's going to change everything. All you do is move the function, or the dysfunction, from one place to another.
Manufacturing guys don't care if the sales guys are sitting with them. The number of people moving to Ohio is less than 20. The North American operations board has our meetings in Ohio now, but we're talking really robust discussions across automotive, motorcycle, power equipment and aircraft.
Say it's Dec. 1 and the Honda Accord is neck-and-neck with the Toyota Camry. What will Honda do to win?
Our industry is like that New Year's Day, where we swear never to do it again. But how long do you maintain that discipline before you start creeping into the bad habits, even if just for a minute? You look at the fleet data -- some [competing] dealers say they can't get enough cars, but they're selling 26 percent fleet. And no one ever reduces incentives. We won't make a customer look silly for buying a car in November versus buying one in December or any other month. We're not going to do anything it takes. We're not going to sacrifice the customer to do it.
Honda has some sticky dealer relations over stair-step incentives. Any improvements?
Over the past 10, five or three years, I would put our dealer relations against anyone in the industry. NADA surveys support that.
It's like a good marriage, where you always have a spat about something. But our process is great. I don't think there's a Honda dealer who would trade with any other brand.
What lessons did you learn from the 2012 Civic?
We made a decision of where we thought the market was going to go. It wasn't a process failure. [Consumers] just didn't go as conservative as we thought they were. And when they didn't, we made a quick recovery. The same idiots who brought you the 2012 Civic also brought you the 2013 Civic, and the Accord and the CR-V.
How are you positioning Acura?
Product fixes everything. The RDX is a good start. And historically the MDX has done a great job. We can get MDX and RDX combined past Lexus RX volumes, except we have a strategy that gives people a choice. The MDX has done a lot to drive the brand in the luxury direction. Establishing ourselves on the car side is the next frontier for us.
That means a lot of hand-to-hand combat. We're not trying to be BMW or Audi. We're trying to be Acura. We've always challenged convention.