Rahul Sachitanand
Sep 8, 2020

Brand Health Check: Can Honda recharge?

The Japanese auto brand is betting its future on going electric, but is playing catchup with a market that is several steps ahead.

Honda T360 and E electric car
Honda T360 and E electric car

When our Asia's Top 1000 Brands research launched in 2004, Honda, along with its rival Toyota, was at the top of the pecking order. This was a time when the Japanese automaker was the toast of the town and could seemingly do no wrong. However, the company, which has been making cars since 1963, has since found itself battling declining brand strength, slipping from a high of sixth place in 2006 and 2007 to fall as low as 32nd three years ago, before reaching 26th in the 2020 listing (see line graph from the Top 1000 below). The company's brand position has slipped not just in its home market of Japan, but across APAC too. 

On other measures too, Honda has struggled. For example, in BrandZ's annual listing for 2020, Honda slipped from fourth to sixth place in the pecking order of carmakers, as its fortunes have been eclipsed by not just conventional car brands that have jumped on the electric bandwagon, but also the rise of Tesla, which has dulled the Japanese brand's fortunes. In this tough battle, Honda's rather plain vanilla vehicles have struggled to stand out. 

With the onset of the pandemic, Honda in May posted its lowest operating profit in four years and declined to provide a forecast for its business. With fewer people venturing out to buy, rent or lease cars, the brand's rocky road to the top, looks only more treacherous. In its latest push to stay current, Honda announced plans to launch its mass market electric car in October. 

Campaign Asia-Pacific asked some industry leaders about how Honda could stop its slide and get its plans back on the road.

Yosuke Suzuki
Managing director
R/GA Tokyo

In previous years, Honda held the reputation of the company that “builds fun cars”. In all its automobile creations, they were able to capture the hearts and minds of car enthusiasts. The winning Formula One car with McLaren and Senna gave them an even stronger foothold in this perception. At the same time, Toyota, its direct competitor, while number one in market share, was perceived as a company that just produces cars for the masses, so Honda had an advantage in exclusivity and brand love.

However, times have changed. While there is still a strong base of Honda fans, the brand is lacking in specific attributes such as cutting-edge design and innovation. It is commonly perceived as an “average” car company in Japan. Today, while Tesla continues to occupy headlines as the future of automobile, Toyota still remains a dominant brand, especially in Japan. Akio Toyoda, CEO of Toyota, recently spoke about the shift from bringing happiness through producing cars, to bringing happiness by championing the future of living through a connected ecosystem. 

To this point, electric cars are merely a part of the bigger picture for Toyota. This puts Honda in a tight spot. They currently do not have a unique edge. In order to compete, it is crucial for the brand to find a space to own. Rebuilding their sports and racing credentials might be a viable option. However, this has to be carefully considered as the new age we live in regards eco-sustainability as a given.  

I believe getting into the mass market of electric is imperative. As an automobile company, you will not survive without making a strong stand on social and environmental issues. Therefore, not getting into electric cars will take them down a slippery slope. With that being said, to succeed is to find an edge in the electric car market. Injecting the “Honda element” into the mix will help them produce cars with an edge—and that goes beyond the product to touch the emotional and human truth aspect. This edge should be centered around [its tagline] 'The power of dreams'—essentially the core of what Honda is about. They don’t need to make the most advanced electric car with technology, but they can set out to be the electric car brand that entices imagination—something we humans have over robots and technology. 

Benoit Weisser
Chief strategy officer
Ogilvy Asia

Arguably Honda is late to the EV party, and having to play catch-up.

Tesla has been defining the space on its own terms, as the most high-profile 'pure-play' brand. Then, conventional ICE players have gradually jumped over the fence, with big investments, new models, and bold sub-brand launches. VW and Renault probably are 'all-in' and leading the way, as an accelerated shift to EVs is mission-critical in the EU home markets they rely on for critical mass. Then Hyundai (Ioniq) is probably next in line.

Japanese players overall have been late to the transition, and perceived to be hedging their bets, after leading and building major share in the 'hybrid' phase.

So as a result, Honda going into EVs at this stage is clearly a commercial imperative, but it will not be seen as a brand-initiated, beliefs-driven, visionary move; it's a pragmatic, necessary move to maintain relevance and participate in growing parts of the market.

As a relative late-comer to the segment, Honda will need to overcome a handicap of saliency, and will need to bring something genuinely different and additive to the category. The super cool Honda e model suggests that the brand still lives by 'The power of dreams', and still has the guts to create something bold, fresh and premium, and will need to build on this to cut-through and succeed.

A totally different angle is about looking at how Honda will need to flex its EV proposition to very different current users across regions and markets—how electrification can both enhance the quiet comfort of British suburban drivers, while exciting Type-R fans on the US West Coast, and relieving urban stress amongst Asian metropolis drivers of the brand. 

Jay Milliken
Senior partner

The Honda brand is all about quality for good value.  They make solid but unremarkable cars. The brand has been quite stagnant for many years. The company hasn’t launched any new models or had any reinvented older models.

Honda is firmly stuck in the middle of the pack of global automakers. Honda has recently seen Korean brands like Hyundai and Kia surpass it in terms of sales, awards and consumer excitement.

Is entering the mass EV category a good idea?

Given the projected growth of EVs worldwide, especially at lower price points, it is a great idea for Honda to (re)enter the market. Honda’s issue with the EV market is its lack of commitment. The company has been in and out of the EV business in different geographies and has showed little vision for what is its EV strategy.

The middle market of EVs is where the action will be in coming years. Tesla’s launch of the Model 3 shows that there is a lot of excitement and growth to come from this segment of the market.

Recently Hyundai has garnered a lot of attention with the launch of its Ioniq sub-brand, done in conjunction with K-pop sensation BTS. This shows that Honda continues to lag behind its key competitors.

This post is filed under...
Brand Health Check: We assess and (if necessary) solicit suggested remedies


Related Articles

Just Published

1 day ago

Unwrapping Spotify Wrapped: What is the industry ...

The marcomms industry understood the assignment, followed the brief, and let music stay rent free in their head, just like an NFT. Here’s what the industry folks have been listening to this year.

1 day ago

Accenture Song acquires Fiftyfive5 to boost data ...

The insights and advisory business will help Accenture Song and Fiftyfive5 tap a rising global customer analytics market and further grow its business in Australia and New Zealand.

1 day ago

GM reveals the sci-fi super team that powers your EV

But is performance and reliability really best left to a gang of stressed out tech-crazy militaristic nerds?

1 day ago

Korean car brand Genesis revs up the tunes in DJ ...

The DJ set took place in Shoreditch, London.