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Why Honda and Toyota Are Slipping

Instead of taking advantage of U.S. automakers' woes in the past few years, the Japanese automakers let themselves slide.

By Claire_Martin Apr 9, 2012 2:09PM
Honda Civic photo by Honda.Formerly the Teflon Dons of the auto industry, Honda and Toyota dominated in innovation, quality and profits for the past 20 years. And when Detroit went into distress in 2008, it would have been reasonable to expect them to take advantage of things such as General Motors' downsizing to four brands from eight. But they didn't. And now Toyota's share of the U.S. market has dropped by nearly 3 percent since 2009, and Honda's by almost 2 percent.

"Ten years ago, Toyota and Honda had the lead and everybody else was behind," Dave Sargent of J.D. Power & Associates told US News & World Report. "That gap has narrowed to pretty much nothing."

Why the decline? The Japan earthquake of March 2011, which seriously disrupted the supply chain, is one reason. But also, Volkswagen, Hyundai and Kia have gotten more aggressive, while Toyota and Honda -- once leaders in customer service and safety -- have become complacent on those issues and others, according the report.
In 2009, 8 million Toyotas were recalled and the company was hit by a massive fine and several lawsuits. Honda, meanwhile, simply seems to have slipped behind the times. It debuted a redesigned 2012 Civic that failed to wow critics who had routinely sung its praises. For only the second time in the car's history, it didn't receive Consumer Reports' vaunted "Recommended" rating (nor did the Insight or CR-Z). 

Meanwhile, Detroit has pumped out zippy new cars to compete with the Japanese automakers' bread-and-butter vehicles. The Chevy Cruze and Sonic and the Ford Focus and Fiesta are new standouts in the field of small, inexpensive and fuel-efficient vehicles -- once the nearly exclusive purview of the Japanese automakers. At the same time, Hyundai and Kia are building cooler cars at a better price point than some of the stodgier models put out by Honda and Toyota.

But all is not lost for the Japanese pair. On the bright side, hybrid sales have been hot for Toyota so far this year, and Honda's new CR-V crossover has earned high points from critics.

45Comments
Apr 10, 2012 9:22AM
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I don't think it is so much Toyota and Honda slipping as it is the Americans and Koreans building an overall more appealing product.  Honda and Toyota have been complacent and resting on their laurels for reliability while the rest of the industry has caught up.

Agreed.  While some of their products are complete garbage, I don't consider MOST Honda or Toyota products to be bad.  The biggest problem they face is that I can't think of one single category where Honda or Toyota is class LEADING. 

 

Pretty good just doesn't cut it these days.

Apr 10, 2012 5:20PM
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Honda and Toyota have been slipping because they build the worst and most boring cars you can buy. Period.
Apr 9, 2012 5:54PM
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Andy,

 

I think many American companies could show some economic patriotism by pulling their foreign investments and outsourced jobs back to America.  Just because you buy an American branded product doesn't make it American. Last year, as an example, the Toyota Camry was the most American car in America as far as assembly, part content and American labor goes. Based on this fact, what does that say for the patriotism of Detroit automakers who import their parts, assemble in foreign countries and invest in foreign labor?

 

 

 

Apr 10, 2012 9:02AM
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I don't think it is so much Toyota and Honda slipping as it is the Americans and Koreans building an overall more appealing product.  Honda and Toyota have been complacent and resting on their laurels for reliability while the rest of the industry has caught up.  Now Toyota and Honda no longer have anything to differentiate them from the rest, especially given the bland appliances they build.  Everyone else has shown the buying public that great styling, excellent interiors/ergonomics, and reliability aren't mutually exclusive like Toyota and Honda would like you to believe.  So why settle for a Toyota or Honda when there are so many better choices out there today.  Toyota and Honda are hoping a fading reputation will be enough to sustain them, but apparently they're wrong.  Market share for both is down.
Apr 10, 2012 1:33PM
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its pretty obvious that toyota and honda had got lazy, i mean they been best selling for 20 years and had a good reputation. We own a toyota sienna (2007 LE) its like a truck/family/road trip car, it tows hauls and never complains yes the quality went downhill but its still the most reliable thing we owned. only one recall has be out for our model ( loose spare tire chain). far better then our dodge caravan we had to sell cause of reliability issues.
Apr 11, 2012 4:54AM
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You can down-vote me, but it's the truth.  No vehicle can go without proper maintenance or repair.  And this is coming NOT from a Toyota hater; as I said, I worked in Toyota service, I have personally owned at least 4 Toyotas, and there have been countless others in my family.  Japanese, American, European, Korean...they all break eventually.
Apr 12, 2012 5:53AM
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I actually don't think anyone except Beltway is worried about market share and recalls.

Really?  You're joking, right?  Then why do you, Troy S., and Just_Great keep bringing the subject up when you're all bashing American companies over and over and over and over and over again?  If recalls are okay, then why bring it up constantly when shoving your anti-American sentiment down people's throats?  You've rambled on for months about recalls from GM and Ford versus your precious Toyota.  There are dozens, maybe even hundreds of posts from you on this blog where all you do is bash American car companies.  You've currently have 399 posts under the "frostyross" name, and I bet 397 of them bash American companies.  And then there's all those posts of yours under the "carbuff346" name that follow the same trend.


You're delusional if you don't think it matters to you people, otherwise why do you three keep it up?  Just read the last paragraph in your post below for proof.  Classic frostyross/carpuff.  You just can't help yourself. 

Apr 10, 2012 6:47PM
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Honda and Toyota cars are boring, plain and simple...look at the updated accord CONCEPT, it looks just like the one being phased out. I personally think the older Camry looks more modern than the new one....Then you have Hyundai and KIA  that I wouldn't have driven a few years back even if I had beer goggles... they are now putting out some of the better looking cars. Yes Toyota and Honda cars are reliable, but what car in America today isn't reliable if you do your scheduled maintenance and change your oil?


Apr 12, 2012 10:58AM
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Frosty, I see you've got your tail between your legs again.  You'll never learn.
Apr 10, 2012 8:48AM
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@556V

The article did not state that Detroit has passed Honda or Toyota in anything, it claimed that the gap was narrowed to practically nothing meaning that Honda and Toyota are still better in those areas, just not as dominant as they were, or the difference is simply minimal in their opinion

@Andy

  When Detroit earns the reputation that Honda and Toyota earned and dominated in for 20 plus years I will start to consider their products. A few good years does not give them the decades long reputation for quality that the Japanese earned. I have owned many brands in my lifetime and thus far the Japanese vehicles that I have owned have been much more reliable and cost effective to own. Make no mistake, once an American auto manufacturer leads in quality and reliability for ten or more years I will then start to spend my money with them again. In the meantime, I am sticking with the completely problem free Toyotas that I have enjoyed for many years. I am not going to purchase inferior products just to save greedy UAW jobs.
  Of all domestic vehicles I have owned, I have never had one that was problem free but am on my fourth Toyota without ever spending a dime on a repair.

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