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Monday, May 17, 2004

Honda: Preparing for the future

Honda is preparing to do something quite clever. They're downsizing. In the midst of higher gas prices, they are going to sell a smaller car than the Civic in the US, the Honda "Fit", or some variant of it. They're also going to sell an SUV smaller than the MDX for Acura.

It just makes sense. Big trucks aren't doing well, and they're going to continue to falter. The technology just isn't there to make them more fuel efficient yet. But if smaller vehicles are available with near the same luxury, people will go into them instead of a competitor.

It's been mentioned on several of the other auto blogs, but it's so important I'm going to mention it here. Companies that don't "downsize" their vehicles, are going to suffer. A great example of this is Chrysler and GM. Chrysler has been advertising non-stop their new Hemis, and GM their somewhat new Hummer H2. Totally the wrong vehicle, at the wrong time. Right now what the public wants, nay, needs, are good small cars. The SUV craze is over, due in no small part to the ever increasing price of oil.

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