After the Lantern Festival on the 15th day of the first lunar month, the traditional Chinese New Year can be considered to have officially ended. GAC Honda also hopes to become the first domestic automaker to hold a new car launch event in the Year of the Dragon. On February 8, the 2012 Accord and City models will be launched in Guangzhou. Interestingly, referring to these two models as "new cars" is somewhat of a stretch; the 2012 Accord merely offers more configuration options, while the biggest change for the 2012 City is its front grille and tail light assembly. The subtle optimizations may be overlooked by inattentive consumers. Honda's product lineup is overly narrow, and the lack of new models is an undeniable fact and currently one of the brand's major concerns in the Chinese market.
No country's consumers love "new cars" as much as Chinese consumers do, which is why in 2011 over 290 various new models were introduced to the market, including anti-skid chains for car tires. In a market where new cars are constantly emerging, Honda's shorter product line is gradually losing the affection of Chinese consumers. In this unique market, having two or even three generations of products coexisting is criticized but still finds its own market. A single class of vehicles can accommodate 3-4 different models from the same brand, and the story of 1+1>1 plays out every day. We can call this the "new car dividend" in the Chinese market. Even among Japanese automakers, Dongfeng Nissan with its extensive product line has a growth rate far exceeding the industry average, whereas Honda, with its narrower product line, must endure the frustration of "no new cars."
Looking back now, a statement made years ago by the boss of a certain domestic automaker—"the more children, the better the fight"—is so forward-thinking and strategically insightful. Regrettably, this strategy has not been fully developed within domestic automakers but has instead been adopted by giants like Volkswagen, General Motors, and Nissan. Originally, Volkswagen was a "multi-brand" automotive group. In the Chinese market, over the next three years, FAW-Volkswagen, SAIC-Volkswagen, and Skoda will introduce more than ten models in the 90,000-180,000 yuan compact sedan segment alone, surpassing the total number of all current Honda models sold in China (8). Currently, the two joint ventures under Honda China offer only eight models, including niche models like the Crosstour and Inspire with low sales volumes. Even within the next three years (2012-2015), the number of completely new models (including imports) Honda can introduce to the Chinese market will not exceed four. Whether for Honda or its two Chinese partners, such a small number of new models is "pitifully insufficient" to cope with the increasingly fierce competition in the domestic market.
Since 2010, Honda has launched only one truly new model domestically, the Crosstour, and a complete redesign of only the Civic. Within the same two-year period, Nissan and Toyota have introduced far more domestic and imported models in the Chinese market compared to Honda. After the launch of the Crosstour, due to the absence of lower-displacement versions, its market coverage remained narrow; the newly launched Civic last year saw a significant improvement in cost-performance ratio but still faced constant sales pressure in the highly competitive compact sedan market domestically.
The 2012 Accord and City models launched at the beginning of the Year of the Dragon, although both are new year models, still reflect the importance GAC Honda places on the launch of these two models. Regardless of whether it's the Accord or the City, both serve as the mainstay sales models for GAC Honda. Intense competition in the mid-size car market before the launch of the new generation Honda Accord will bring greater pressure to Honda. The launch of the 2012 Accord can be seen as an "adjustment of the product line" at the official level of GAC Honda, enhancing the competitiveness of this model through additional features and price range adjustments.
Unlike the 2012 Accord, the 2012 City is an optimization based on consumer demand and market feedback. The redesigned front end can attract more consumer attention, and improvements in details of the front and rear bumpers along with interior color adjustments can also attract some consumer interest. In this细分market, the City enjoys a higher overall positioning than competitors like the Sunny and K2 thanks to its good craftsmanship and brand advantages. Since 2010, the City's monthly average sales have consistently exceeded ten thousand units, and in December last year, with terminal promotions, it even set a historical high of 17,800 units sold. For Honda, as long as there is enough terminal discount, there is no unsold volume.
It is unrealistic in the short term for Honda to increase its new car launches in the Chinese market, as this automaker's global product line is much shorter than that of Toyota and Nissan. However, any automaker must understand and value the purchasing habits and consumption psychology of Chinese consumers. For novelty-seeking Chinese people, continuously launching new products is crucial for leading brands to maintain their market leadership. Currently, many joint ventures (with 5-6 models) can comprehensively update their products every 2-3 years (including facelifts and full redesigns). For joint ventures like GAC Honda and Dongfeng Honda with shorter product lines, they need to increase the frequency of updates and redesigns for their models sold in the Chinese market, considerations that should be included from the initial design of the next generation models. To a large extent, Honda's current shortage of new cars in the Chinese market is related to this.
Comment by Ji Ren: Similar to last year, Honda will have only one fully updated domestic model this year (CR-V), with the possible import of a small coupe named CR-Z. In terms of mass-market product lines, Honda still needs a continuous flow of new models. The success of the City in the past serves as an example; Honda does not lack brand appeal in the Chinese market but lacks entirely new products that meet domestic consumer needs. Toyota and Nissan have accelerated the introduction of new models and product line layouts in recent years. Without foresight, problems will inevitably arise. Honda, how long do you plan to wait regarding the issue of introducing new models?
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