Honda studying possibility of creating third, youth-themed brand
By YUZO YAMAGUCHI | Automotive News
TOKYO -- With one eye on Toyota's new Scion sales channel, Honda Motor Co. is considering the need for a third brand to appeal to the coveted youth market.
In an interview here last week, Honda CEO Takeo Fukui said without elaborating that the automaker has been studying the possibility of creating a new brand aimed at the Generation Y market, defined as those born from 1977 to 1994.
Although used Civics have a huge following among the youthful "Fast and Furious" tuner crowd, the Honda and Acura brands appeal to more mainstream, middle-aged buyers. Honda developed the boxy Element sport wagon with the youth market in mind, but it has been attracting forty-something buyers.
"We need the study," Fukui said. "But I haven't heard the progress of the study, so it's hard to say if we should keep working on it."
American Honda Motor Co. CEO Koichi Amemiya disclosed the company's interest in Toyota's Scion experiment in an earlier interview. Toyota launched the Scion channel in California last month with two vehicles, the xA hatch and boxy xB sport wagon.
"I'm not saying we're studying a franchise," he said. "We're studying (the market for) young customers. I'm wondering if they are simply looking for compact cars."
Tatsuo Yoshida, analyst at Deutsche Securities Ltd. in Tokyo, says Honda has no option but to create a youth brand. According to a study by J.D. Power and Associates, vehicle sales to Gen Y household heads will rise to 3.5 million units by 2010, or 20 percent of total industry sales, and to 5 million new-vehicle sales annually by 2020.
"They can't let these young buyers go to rivals," Yoshida says. "They should be OK for now, but in 10 years the current baby boomers will be getting old."
A decision on whether Honda will follow Toyota is just part of Fukui's agenda for renovating Honda's model lineup. "We had focused on the social acceptance" of cars, Fukui said. "But now I personally hope to revive the fun-to-drive concept."
That means Honda will come to market with more technological breakthroughs to distinguish itself from the competition, he said.
Two light trucks scheduled for the U.S. market in the next three years could showcase Fukui's fun-to-drive approach. One, to be badged a Honda, is based on the MDX sport wagon.
"It will be a new genre, a new niche," Fukui said, refusing to comment on reports that the vehicle will be a short-bed SUV-type compact pickup.
The second vehicle will be badged as an Acura and will be about the size of the Honda CR-V.
Shoring up the U.S. lineup of light trucks is one of Fukui's top priorities. While light trucks accounted for half of U.S. sales last year, they accounted for only one-third of Honda's volume.
Honda aims to boost light-truck sales almost to match sales of passenger cars in several years to come. "We should respond to demand," Fukui said.
Even so, Fukui isn't about to gamble. He said he has no plans to develop a full-sized pickup or to expand production capacity by building more plants in North America.
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God please no!
