Honda Acknowledges TL Quality Issues
06-16-2004, 10:09 AM
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Honda Acknowledges TL Quality Issues
Don't know if you saw this (or if it a repost), but in the auto round table in USA Today a couple weeks ago check out what the Honda guy said (bolded):
Posted 5/23/2004 9:50 PM Updated 5/24/2004 8:45 AM
Carmakers eye economy with unease
An economic stumble - resulting in a fall in consumer confidence - is their big worry this year, executives of the U.S. arms of five import automakers say.
Despite better products, a new car "is an eminently postponable purchase if you don't feel confident in the economy," said Nissan North America chief Jed Connelly, who participated in an import automaker roundtable with USA TODAY last week.
Panel members
Photos by H. Darr Beiser, USA TODAY
Richard Colliver of Honda.
Vic Doolan of Volvo.
Robert Cosmai of Hyundai.
Jed Connelly of Nissan.
Don Esmond of Toyota.
Others on the panel: Richard Colliver, head of American Honda Motor (HMC); Donald Esmond, head of the Toyota (TM) brand in the USA; Robert Cosmai, Hyundai Motor America's chief; and Victor Doolan, head of Volvo Cars of North America.
Auto sales this year through April were up about 3% compared with a year ago. Automakers sold 16.6 million in 2003. The panelists' predictions for 2004 ranged from about the same as last year to 16.9 million.
The Iraq war and the ever-present threat of terrorism are a drag on the economy, Cosmai said, but "the overall driving force is: 'Am I going to be working at the end of the month or at the end of this week?' "
Colliver noted that there are 2.3 million fewer jobs than in 2001, a fact that keeps younger people out of the new-car market. "The lack of jobs has driven the average age of our products up," he said.
Esmond said the economy is a concern short term. But he's optimistic about the longer outlook. "We've got a lot of faith in the economy and the direction. We know the U.S. market is going to grow, and we're making a lot investment to grow with it."
The panel was questioned by USA TODAY automotive reporters James R. Healey, Earle Eldridge, David Kiley and Jayne O'Donnell and automotive editor Judith Barra Austin.
Question: Toyota's North American manufacturing chief, Art Niimi, says suppliers here deliver 500 defective parts per million vs. 15 in Japan. Assuming that's typical industrywide, what hope do buyers have of getting top-quality vehicles from your North American factories?
Esmond: It may be 500 here, 15 in Japan, but the overalll quality of the product is more than acceptable. I think we've been working with our suppliers a long time in Japan and certainly (have) a much shorter hisotry here in the states.
Besides the quality, there's a lot of cost pressure. I think what they appreciate, at least working with Toyota, and I'm sure some of the others, is we don't go in and say, "Reduce the costs by 6%; if you don't, somebody else is going to get the business." We go in and say we want to come in and help you where you can save costs so we can reduce our overall price. So it's a different approach, and from my perspective, U.S. suppliers are more than willing to do that, roll up their sleeves, and we'll go in with them and help.
Connelly: Don hit the nail on the head. It's the length of the relationship with the supplier base, and clearly, the relationship is much longer in Japan. I think when you establish a new relationship in any industry, I think there's a process that you go through until they understand exactly what you want. But I don't think there's any question (that) the quality from both places can be comparable. I think the longer you work with a supplier and, like Don said, the more deeply you work with the supplier, I think the better the relationship and the better results are going to be. We're a lot newer building cars in the United States than we are in Japan.
Colliver: The Honda division actually improved (in quality scores) this year, and where we slipped was on the Acura. The introduction of the (U.S.-made) TL, we had a few quality issues that actually brought the Acura down. But I think the relationship that you have with your suppliers is critical, and they're long-term relationships. Like Don said, we don't go in and threaten to take business away from these suppliers. We go in and work with them to improve their efficiencies and qualities to help keep their costs down.
Cosmai: This is going to be one of our larger challenges. In fact, about a month ago, I was down in Montgomery, (Ala., where Hyundai is building a factory) and some of the biggest things the people on the plant side have been talking about is the interview of all the individual suppliers. Each one comes on board one at a time. One of the biggest concerns from our company's perspective is supplier relationships, and basically, we can do a lot of things on the plant side, but if we don't have a relationship with our suppliers as far as the quality end with them, that will be a real challenge.
Talk is cheap. You have to deliver on it, and do it consistently over the long run.
Q: How important is it to have gas/electric hybrid vehicles? If you don't, will you be viewed as technologically or environmentally backward?
Doolan: Today's economic situation and price of fuel is driving a change in consumer perceptions of diesel and hybrids. Volvo is in a good position to have both. We have strong diesel engines in Europe and, obviously, have access to hybrid technology through Ford. (Volvo is owned by Ford Motor.) Right now, you have the Japanese pushing the hybrid solution. They don't have a strong diesel market in Japan. Is hybrid a symbol of environmentalism? I think so. Is it a symbol of technology? I think it is, as well. I think those that don't have hybrids will be seen as lacking an environmental attitude, as well as lacking technology.
Connelly: In 2006, Nissan will have hybrid technology in the 2007 Altima sedan through technology we have licensed from Toyota. We'll also have diesel technology in Europe. We feel we have a balance of technology. I think hybrid technology is a solution, but I think it's not the only solution as we go forward.
Cosmai: From Hyundai's perspective, we have run the diesel application pretty heavily in Europe and (South) Korea. We also have a hybrid we are looking at in Korea with a mini car. We are looking at a diesel car in the U.S., but probably not until later in the decade. As far as hybrids in the U.S., I'm not sure of the total number of Toyota Priuses being sold as a percentage of total sales. It's still a relatively small percentage.
Colliver: We're in our second vehicle with the Civic. And we have the Accord V-6 hybrid coming to the U.S. in September. We are going to continue to put efforts in hybrids. We also have a big push on with hybrid hydrogen fuel-cell vehicles. And we have worked on diesel. There's a major effort to expand our sales in Europe, and we know we had to do that with diesel.
Esmond: We've been selling the Prius for a long time, and I think Toyota feels it's part of a world commitment to the environment. There are a lot of solutions to preserving the environment. Gas-electric hybrid is one of them. Diesel is going to be another one. Certainly, hydrogen fuel cells is another.
When we launched Prius, we had to sell not only the vehicle, but the technology. So it was a crapshoot, particularly in the U.S. where electric cars didn't have the best image. Initially, in the U.S., Prius buyers were environmentally concerned. But as the technology became more accepted, Prius continued to go more mainstream. As we saw gas prices go up, we saw Prius sales not just with environmental folks, but we have seen people cross-shopping Prius with Corollas.
Q. Americans seem to prefer American full-size trucks, even if the import brands are built in the USA and are very competitive. Why do you think that is?
Connelly: We did a lot of research before we launched the (Nissan Titan full-size pickup), and we were told pretty clearly by most truck consumers - not all, but 80% - that if you give us what you say you're going to give us, the size, power, torque, towing capacity, we'll definitely put you on the consideration list, and we did that. I can tell you that buyers are extremely satisfied. I can also tell you that we knew that the buyer of the full-size truck is a much slower and more deliberate purchase process. It's not a spot delivery like we have in many other segments. We were willing to take our time and build the volume: 100,000 units, 5% of the segment. We were ramping up very close to schedule, and by the end of May, I think the question will cease to be asked.
Esmond: We're betting $800 million (to build a truck plant in San Antonio) that there's a market there. I think what you have to understand is there are probably no other markets in the U.S. as competitive and loyal as the full-size truck market. It's not only between domestic and import. It's between the Ford boys and the Chevy boys, the Dodge boys. There's huge loyalty there that is going to take some time, and as Jed said, with good products, consumers will make the choice. Look at (Toyota) Camry and (Honda) Accord today, the volumes we do in that midsize sedan market. You could have said the same thing about us once upon a time. So give us a little time.
Colliver: The loyalty on the domestic side for these trucks is very, very strong, and all of our research is pointing that out. It's going to take time - just like it did in the passenger car business. If we were sitting here 25 years ago, you would have been asking us: Honda, why are you building a plant in Alabama to build economy cars? You can't penetrate the market. They want big cars.
Doolan: I don't think you should assume the (U.S. automakers) will sit back and let this happen. They've learned from the experiences of the past. There is a strong loyalty. I'm a great believer in the F-150, and I wouldn't take it for granted. I think the Americans know their strength. They will build on that strength, and they make some very good trucks today.
Q: Detroit automakers say if dealer money and bonuses are counted, import automakers spend more on sales incentives than you admit. What's the truth about incentives?
Esmond: If you offer the good quality products that customers want, you don't need incentives.
Colliver: We're extremely careful about how we use incentives, because we have one real strength, and that's our used-car values and the residuals that we have on leases. We are very protective of that. We don't design our product and price our product with incentives anticipated. We price our vehicle at what we think is a good value for the consumer, and the consumer will pay that price. The domestics, when they announce a new model car and they've got a $2000 incentive on it that day - it had to be planned.
Connelly: Big incentives are a fact of life. I think you use them tactically, if not strategically. I think if you use incentives as a matter of course all the time, it does damage the brand. Sixty percent of every dollar you put on a new vehicle (as an incentive) rolls right through to the used-car markets. So tens of thousands of used vehicles are suddenly worth $600 less for every $1,000 on the new vehicle. If you do that too frequently, too liberally, I don't think there's any question what it will do to your brand over time.
Esmond: Incentives have their place in terms of a tactic. Now, you've got some dynamics in the marketplace, because I think everybody expected much stronger sales this year. Inventories are around a 13-year high. When you have that kind of oversupply, and you want to keep factories running, I guess you have to spend incentive dollars. The key is incentives should be a tactic, not a strategy. I don't think it's a stigma.
Doolan: Can I speak up for the Americans? I think they also use incentives as tactical, not strategic. Everyone is using incentives right now. When I watch TV in California, I can see 0% (financing) deals from Asian competitors as well as American. Do incentives have a stigma? Ask the customers. I don't think so, because they buy it. Do they hurt residual value? Absolutely. Again, it depends how you do it.
Posted 5/23/2004 9:50 PM Updated 5/24/2004 8:45 AM
Carmakers eye economy with unease
An economic stumble - resulting in a fall in consumer confidence - is their big worry this year, executives of the U.S. arms of five import automakers say.
Despite better products, a new car "is an eminently postponable purchase if you don't feel confident in the economy," said Nissan North America chief Jed Connelly, who participated in an import automaker roundtable with USA TODAY last week.
Panel members
Photos by H. Darr Beiser, USA TODAY
Richard Colliver of Honda.
Vic Doolan of Volvo.
Robert Cosmai of Hyundai.
Jed Connelly of Nissan.
Don Esmond of Toyota.
Others on the panel: Richard Colliver, head of American Honda Motor (HMC); Donald Esmond, head of the Toyota (TM) brand in the USA; Robert Cosmai, Hyundai Motor America's chief; and Victor Doolan, head of Volvo Cars of North America.
Auto sales this year through April were up about 3% compared with a year ago. Automakers sold 16.6 million in 2003. The panelists' predictions for 2004 ranged from about the same as last year to 16.9 million.
The Iraq war and the ever-present threat of terrorism are a drag on the economy, Cosmai said, but "the overall driving force is: 'Am I going to be working at the end of the month or at the end of this week?' "
Colliver noted that there are 2.3 million fewer jobs than in 2001, a fact that keeps younger people out of the new-car market. "The lack of jobs has driven the average age of our products up," he said.
Esmond said the economy is a concern short term. But he's optimistic about the longer outlook. "We've got a lot of faith in the economy and the direction. We know the U.S. market is going to grow, and we're making a lot investment to grow with it."
The panel was questioned by USA TODAY automotive reporters James R. Healey, Earle Eldridge, David Kiley and Jayne O'Donnell and automotive editor Judith Barra Austin.
Question: Toyota's North American manufacturing chief, Art Niimi, says suppliers here deliver 500 defective parts per million vs. 15 in Japan. Assuming that's typical industrywide, what hope do buyers have of getting top-quality vehicles from your North American factories?
Esmond: It may be 500 here, 15 in Japan, but the overalll quality of the product is more than acceptable. I think we've been working with our suppliers a long time in Japan and certainly (have) a much shorter hisotry here in the states.
Besides the quality, there's a lot of cost pressure. I think what they appreciate, at least working with Toyota, and I'm sure some of the others, is we don't go in and say, "Reduce the costs by 6%; if you don't, somebody else is going to get the business." We go in and say we want to come in and help you where you can save costs so we can reduce our overall price. So it's a different approach, and from my perspective, U.S. suppliers are more than willing to do that, roll up their sleeves, and we'll go in with them and help.
Connelly: Don hit the nail on the head. It's the length of the relationship with the supplier base, and clearly, the relationship is much longer in Japan. I think when you establish a new relationship in any industry, I think there's a process that you go through until they understand exactly what you want. But I don't think there's any question (that) the quality from both places can be comparable. I think the longer you work with a supplier and, like Don said, the more deeply you work with the supplier, I think the better the relationship and the better results are going to be. We're a lot newer building cars in the United States than we are in Japan.
Colliver: The Honda division actually improved (in quality scores) this year, and where we slipped was on the Acura. The introduction of the (U.S.-made) TL, we had a few quality issues that actually brought the Acura down. But I think the relationship that you have with your suppliers is critical, and they're long-term relationships. Like Don said, we don't go in and threaten to take business away from these suppliers. We go in and work with them to improve their efficiencies and qualities to help keep their costs down.
Cosmai: This is going to be one of our larger challenges. In fact, about a month ago, I was down in Montgomery, (Ala., where Hyundai is building a factory) and some of the biggest things the people on the plant side have been talking about is the interview of all the individual suppliers. Each one comes on board one at a time. One of the biggest concerns from our company's perspective is supplier relationships, and basically, we can do a lot of things on the plant side, but if we don't have a relationship with our suppliers as far as the quality end with them, that will be a real challenge.
Talk is cheap. You have to deliver on it, and do it consistently over the long run.
Q: How important is it to have gas/electric hybrid vehicles? If you don't, will you be viewed as technologically or environmentally backward?
Doolan: Today's economic situation and price of fuel is driving a change in consumer perceptions of diesel and hybrids. Volvo is in a good position to have both. We have strong diesel engines in Europe and, obviously, have access to hybrid technology through Ford. (Volvo is owned by Ford Motor.) Right now, you have the Japanese pushing the hybrid solution. They don't have a strong diesel market in Japan. Is hybrid a symbol of environmentalism? I think so. Is it a symbol of technology? I think it is, as well. I think those that don't have hybrids will be seen as lacking an environmental attitude, as well as lacking technology.
Connelly: In 2006, Nissan will have hybrid technology in the 2007 Altima sedan through technology we have licensed from Toyota. We'll also have diesel technology in Europe. We feel we have a balance of technology. I think hybrid technology is a solution, but I think it's not the only solution as we go forward.
Cosmai: From Hyundai's perspective, we have run the diesel application pretty heavily in Europe and (South) Korea. We also have a hybrid we are looking at in Korea with a mini car. We are looking at a diesel car in the U.S., but probably not until later in the decade. As far as hybrids in the U.S., I'm not sure of the total number of Toyota Priuses being sold as a percentage of total sales. It's still a relatively small percentage.
Colliver: We're in our second vehicle with the Civic. And we have the Accord V-6 hybrid coming to the U.S. in September. We are going to continue to put efforts in hybrids. We also have a big push on with hybrid hydrogen fuel-cell vehicles. And we have worked on diesel. There's a major effort to expand our sales in Europe, and we know we had to do that with diesel.
Esmond: We've been selling the Prius for a long time, and I think Toyota feels it's part of a world commitment to the environment. There are a lot of solutions to preserving the environment. Gas-electric hybrid is one of them. Diesel is going to be another one. Certainly, hydrogen fuel cells is another.
When we launched Prius, we had to sell not only the vehicle, but the technology. So it was a crapshoot, particularly in the U.S. where electric cars didn't have the best image. Initially, in the U.S., Prius buyers were environmentally concerned. But as the technology became more accepted, Prius continued to go more mainstream. As we saw gas prices go up, we saw Prius sales not just with environmental folks, but we have seen people cross-shopping Prius with Corollas.
Q. Americans seem to prefer American full-size trucks, even if the import brands are built in the USA and are very competitive. Why do you think that is?
Connelly: We did a lot of research before we launched the (Nissan Titan full-size pickup), and we were told pretty clearly by most truck consumers - not all, but 80% - that if you give us what you say you're going to give us, the size, power, torque, towing capacity, we'll definitely put you on the consideration list, and we did that. I can tell you that buyers are extremely satisfied. I can also tell you that we knew that the buyer of the full-size truck is a much slower and more deliberate purchase process. It's not a spot delivery like we have in many other segments. We were willing to take our time and build the volume: 100,000 units, 5% of the segment. We were ramping up very close to schedule, and by the end of May, I think the question will cease to be asked.
Esmond: We're betting $800 million (to build a truck plant in San Antonio) that there's a market there. I think what you have to understand is there are probably no other markets in the U.S. as competitive and loyal as the full-size truck market. It's not only between domestic and import. It's between the Ford boys and the Chevy boys, the Dodge boys. There's huge loyalty there that is going to take some time, and as Jed said, with good products, consumers will make the choice. Look at (Toyota) Camry and (Honda) Accord today, the volumes we do in that midsize sedan market. You could have said the same thing about us once upon a time. So give us a little time.
Colliver: The loyalty on the domestic side for these trucks is very, very strong, and all of our research is pointing that out. It's going to take time - just like it did in the passenger car business. If we were sitting here 25 years ago, you would have been asking us: Honda, why are you building a plant in Alabama to build economy cars? You can't penetrate the market. They want big cars.
Doolan: I don't think you should assume the (U.S. automakers) will sit back and let this happen. They've learned from the experiences of the past. There is a strong loyalty. I'm a great believer in the F-150, and I wouldn't take it for granted. I think the Americans know their strength. They will build on that strength, and they make some very good trucks today.
Q: Detroit automakers say if dealer money and bonuses are counted, import automakers spend more on sales incentives than you admit. What's the truth about incentives?
Esmond: If you offer the good quality products that customers want, you don't need incentives.
Colliver: We're extremely careful about how we use incentives, because we have one real strength, and that's our used-car values and the residuals that we have on leases. We are very protective of that. We don't design our product and price our product with incentives anticipated. We price our vehicle at what we think is a good value for the consumer, and the consumer will pay that price. The domestics, when they announce a new model car and they've got a $2000 incentive on it that day - it had to be planned.
Connelly: Big incentives are a fact of life. I think you use them tactically, if not strategically. I think if you use incentives as a matter of course all the time, it does damage the brand. Sixty percent of every dollar you put on a new vehicle (as an incentive) rolls right through to the used-car markets. So tens of thousands of used vehicles are suddenly worth $600 less for every $1,000 on the new vehicle. If you do that too frequently, too liberally, I don't think there's any question what it will do to your brand over time.
Esmond: Incentives have their place in terms of a tactic. Now, you've got some dynamics in the marketplace, because I think everybody expected much stronger sales this year. Inventories are around a 13-year high. When you have that kind of oversupply, and you want to keep factories running, I guess you have to spend incentive dollars. The key is incentives should be a tactic, not a strategy. I don't think it's a stigma.
Doolan: Can I speak up for the Americans? I think they also use incentives as tactical, not strategic. Everyone is using incentives right now. When I watch TV in California, I can see 0% (financing) deals from Asian competitors as well as American. Do incentives have a stigma? Ask the customers. I don't think so, because they buy it. Do they hurt residual value? Absolutely. Again, it depends how you do it.
06-16-2004, 10:58 AM
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I did read this back then and was surprised to see him specifically mention the TL. Since the Chairman knows, I hope it means the issues (flattspotting, poor wet traction EL42's, memory seat problem, drooping headliner) will be resolved for the '05 I WILL purchase.
06-16-2004, 11:05 AM
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i do not understand how honda would risk quality issues with their acura line. its suppose to be their luxury division. i would think that they base their qc off of the honda line and do more to improve upon it and make it more strict. but whatever the case i don't think its as severe as we make it to be. i have very little problems with the car and its been great so far.
06-16-2004, 11:08 AM
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Interesting that he acknowledges the problems to the press but not the dealers and customers. Working over time with suppliers to improve things certainly doesn't help those that bought pre-improvement cars.
15k miles of a quality dream here!
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06-16-2004, 12:11 PM
#10
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It's great to hear the executives at Acura state there may be issues, and further what they're going to do. I wish they'd communicate that to owners. That said, the issues I've had are all truly minor with the exception of the tires, which to me are a safety issue.
By the way.....if you look in past threads on tires in the 2G thread, you'll find just as many complaints about those "damn Michelins", mostly from people like us who are enthusiasts and like to turn corners a little faster than the average Joe. The Bridgestone EL42 fiasco is what we got because of these complaints. I wish that the Pilot Sport A/S was standard equipment...I'd pay a little extra for that.
By the way.....if you look in past threads on tires in the 2G thread, you'll find just as many complaints about those "damn Michelins", mostly from people like us who are enthusiasts and like to turn corners a little faster than the average Joe. The Bridgestone EL42 fiasco is what we got because of these complaints. I wish that the Pilot Sport A/S was standard equipment...I'd pay a little extra for that.
06-16-2004, 01:30 PM
#15
an Acura has-been
Originally Posted by J RIDE 81
I believe he is just addressing the minor issues. Nothing major. My TL was the best purchase I ever made. I love the car to death.
I know some think I might be a troll, but look at my original posts, I did not start that way, Acura turned me into one.
I did own an 04 TL for 4 months, so I do know what I am talking about, my life is better without the TL, however, I do miss many of the features and characteristics if they could have gotten the rest right.
06-16-2004, 04:35 PM
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Colliver: The Honda division actually improved (in quality scores) this year, and where we slipped was on the Acura. The introduction of the (U.S.-made) TL, we had a few quality issues that actually brought the Acura down. But I think the relationship that you have with your suppliers is critical, and they're long-term relationships. Like Don said, we don't go in and threaten to take business away from these suppliers. We go in and work with them to improve their efficiencies and qualities to help keep their costs down.
06-16-2004, 06:53 PM
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Originally Posted by 1SICKLEX
This needs to be on the hompage. The Tl is built out of white castle boxes.......
06-16-2004, 07:05 PM
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Originally Posted by vtechbrain
Maybe you got the one built by FORD! 
Nothing wrong with Ford, statistic whores claim there is, but until I buy a bad one I'm going to say they make fine cars. Statistics say my TL should be near perfect, goes to show what statistics mean...
PS... Yes I do still own a Ford and yes it's still fine and no I'm not trading my TL yet and when I do yes it will be on a Ford.
06-16-2004, 09:19 PM
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I've always had a Ford in the family (Mazda B4000 - FORD built), Explorer, Mustang, F-150, new F150 most recently)... And while I liked every one of them.........
You show me a 5 year old Ford without a rattle and I'll show you a man going deaf.
You show me a 5 year old Ford without a rattle and I'll show you a man going deaf.
06-17-2004, 06:23 AM
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you got that right!!!
Originally Posted by soopa
A definate first for traditionally tight lipped Acura.
can't believe he even fessed up to that! now you can walk into the dealer w/ the article if they try and b.s you about anything!?
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