Honda, Nissan and Toyota Are Hurting in U.S., Too

With so much negative attention focused on the Detroit Big Three, it’s easy to overlook the fact that today’s U.S. market is more like the Big Six.

While their parent companies are in much better shape globally, the leading foreign brands in the United States, Honda, Nissan and Toyota,  are quietly having about as much trouble moving the metal lately as Chrysler, Ford and GM. Honda’s U.S. sales fell 31.6 percent in November from the year-ago month; Nissan fell 42.2 percent; Toyota dropped 33.9 percent, according to AutoData Corp.

And while the Japanese brands are less dependent than the Detroit automakers on truck sales, it’s not for lack of trying. Toyota has done its best to crack the full-size pickup market with successive generations of the Tundra model, which nevertheless is still an also-ran. Ditto for Nissan and the Titan, only more so. Honda, which has a reputation for smaller vehicles and better gas mileage, also has the big Ridgeline crossover pickup.

The fact is, the Big Six are starting to resemble each other more and more. If high gas prices, the credit crunch and the U.S. recession had caught the U.S. industry a few years later, the U.S. subsidiaries of the Japanese companies might have been in more trouble than they are today, because they would have resembled the Detroit Big Three even more than they do now.

In as sign of the times, Honda joined GM late last week in announcing production cuts in the first quarter of 2009. Honda cut an additional 119,000 units of production from its North American schedule. For the fiscal year ending March 31, 2009, that brings to 175,000 the number of units cut from the annual plan, nearly all of which fall in the coming quarter.

Even so, Honda is building close to 1.3 million cars and trucks in North America for the fiscal year. That’s about 80 percent of the company’s sales volume, which makes the term “import brand” outdated, said Honda spokesman Ed Miller.

Meanwhile, critics like Michael Moore, Tom Friedman and others today are raking the Detroit companies over the coals for supposedly “failing to build cars people want to buy,” by which they presumably mean small cars and hybrids.

That’s 20-20 hindsight at best, or just plain baloney at worst. In the 1990s through 2004, the U.S. market skewed overwhelmingly to pickup trucks and SUVs, and the Detroit Big Three built exactly what most people wanted to buy – pickup trucks and SUVs. The Japanese brands saw it the same way, and scrambled to produce ever-bigger and more powerful trucks.

The problem is that since 2004, when gas prices first started to spike, what constitutes “cars people want to buy” changed faster than the domestic brands could react. That doesn’t get the Detroit Big Three off the hook. They should have invested in flexible plants that can switch from cars to trucks and back again, like Honda has. Even with flexible plants, there’s a point below which everybody suffers, as Honda’s recent production cuts show.

But if people are going to beat Detroit up, they should at least get it right.