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Citing Competition, Honda Announces Civic Overhaul

Filed by KOSU News in Business.
December 20, 2011

Here’s some interesting news about the car market in the United States: Citing increased competition, Honda said it is taking the unusual step of redesigning its Civic sedan months after a unveiling its 2012 model this summer.

Here’s what Tetsuo Iwamura, chief executive for American Honda Motor Co., told The Detroit News:

“When Honda started developing the Civic, ‘competition was not as fierce,’ Iwamura said, noting the Detroit automakers were suffering financially and General Motors Co. and Chrysler Group LLC filed for bankruptcy protection and European automakers ‘were not as robust here.’

“But today, the Civic faces stiff competition from Detroit, including the Chevrolet Cruze and Ford Focus and Fiesta.

“‘We’re facing an industry that’s more revitalized,’ Iwamura said.

“Even though customers are cross shopping more than ever before, ‘we think we have a little edge in understanding what the customers wants,’ he said.”

So how serious is the threat to Honda? As the AP’s auto writer Tom Krisher puts it, revamping a car this quickly is an “unprecedented” move “for any carmaker because new models aren’t usually revamped for at least three years.”

“Part of the problem is the expectations of Honda customers and journalists are very high,” John Mendel, executive vice president of Honda, told the Detroit News. “A good car is not good enough sometimes.”

Honda plans unveiling a revamped 2013 Civic late next year. Bloomberg reports that after failing to receive a “recommended” status from Consumer Reports, sales of the Honda Civic fell 13 percent this year. Another issue Honda is facing is that its inventory has been battered first by floods in Thailand and then by the earthquake and tsunami in Japan. [Copyright 2011 National Public Radio]

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