Will Honda’s Move Towards ‘Efficiency’ Help Nissan in North America?

We reported extensively about the Takata airbag recall last year. During the end of 2014, this recall effort called for vehicles with potentially faulty airbag units to be replaced. Certain cars, especially those in harsher climates, had problems with exploding airbag inflators that caused injuries and seven confirmed deaths, including six in the U.S. The brand that was the hardest hit by this recall was Honda.

The Japan-based automaker recalled 5.4 million vehicles during the ongoing airbag recall. In a report in the Wall Street Journal, Honda’s Chief Executive Officer, Takanobu Ito said, “We (Honda) want to be more efficient. Even though we’re narrowing these down, that doesn’t mean our business would shrink.” This could mean Honda losing certain models while focusing their efforts on others. The Detroit Bureau reports that this drive to be more “efficient” also means that Honda is scrapping its sales target of six million units before the end of 2017. The company will be reducing redesign on certain models by approximately one-fifth. The consolidation and streamlining position that Honda is taking looks vastly different from that of one of their competitors.

We reported recently that Nissan wants to grab 10 percent of the U.S. auto market share. They are reportedly ramping up their production and hiring to get there. They currently have about 7 percent of the market share according to DN and trail Honda as the third most successful Japan-based import OEM in the U.S. If Nissan is ramping up while Honda is scaling back due to a bad year of recalls, isn’t it possible that Nissan will grow its market share and possibly pass Honda? Maybe, however, that share will be taken from someone else, such as another common competitor: Toyota.

Toyota’s sales numbers grew 13 percent year over year into 2014. Nissan saw 7 percent sales growth and Honda had a 2 percent increase. In the battle of Japan-based imports, Nissan may be looking strong against Honda while they shuffle their fleet post-recall, however, they have some work to do in order to catch Toyota. Will Nissan overtake Honda as the number two Japan-based automaker in the U.S.? Will either one of them catch Toyota during the next five years? How will Honda’s decision to improve efficiency impact them in the short run?