Followers Regret. How Honda Motor Co Failed

The Japanese automotive manufacturing industry was built on a pioneering vision, which over the course of decades has cemented it amongst the global industry. When one thinks of Japanese vehicles today, quality, reliability and longevity almost certainly feature as sentiments.

Brands like Lexus and its parent Toyota, enjoy the kind of brand equity that many can only wish for. Their success is underpinned by “Kaizen”; a philosophy designed to tighten manufacturing processes whilst improving quality with minimal wastage. The philosophy has not only succeeded in the factory but delivered entire MBA studies for decades.

But back when they first forayed away from home turf, they were the outcast; the new entrant with “flimsy panels” and a lack of quality. The year was 1958 when the first Japanese car was launched to the world, starting in the United States, with the Toyopet Crown. It was a winner at home, but an odd name wouldn’t have done it any favours in a parochial US market.

The Toyopet Crown

Not long after its US launch, export of the car was halted off the back of build issues and a less than favourable market response. It did however return and was the first in a long line of passenger-focused vehicles for the brand.

This is not to say Toyota lacked interest in motor racing or vehicles designed to excite. In fact, the Toyopet Crown was entered into the 1957 Mobilgas Rally in Australia of all places, as part of the brands’ first motor racing venture. Since then, it has enjoyed motorsport involvement across various genres, from Rally to Formula One and even Nascar. On the manufacturing front, its heritage of building sports cars dates back to the Toyota Sports 800, a model which preceded the magnificent 2000GT in 1967. The latter a model that many attribute a shift in the perception of Japanese cars forever.

Soichiro Honda was a car enthusiast well before he established Honda Motor Co Ltd in 1948 with co-founder Takeo Fujisawa. He took a passion for cars that stemmed from the first car he saw as a toddler, and over a decade as an apprentice mechanic, to start his own automotive repair business in 1928 at the age of 22. Having once said that motor oil smelled “like perfume” and later racing a turbocharged Ford in 1936, it’s no surprise that the second model brought to the western market by the manufacturer was a sports car.

The S500 was launched in 1963 following the N360, a Kei-sized pickup truck. The pint-size roadster was powered by a 531cc 4-cylinder that made 44hp at a peaky 8000rpm. Chain driven and featuring independent rear suspension, it showcased Honda’s motorcycle racing roots.

The Honda S500

Subsequent years saw Honda market a variety of vehicles, but it was the period between the mid 80-s through to early 2000’s where their racing roots were most prevalent.

Nameplates such as the CR-X, Prelude, Integra, the S2000 and brilliant NSX were all known for a prudent blend of quality and performance. It wasn’t just fancy names and sporty designs either, Honda was the first to bring to market a viable mass-produced variable valve timing and lift architecture in the form of their renowned VTEC. The advent resulted in an engine that could be miserly at lower engine revolutions, whilst providing displacement-defying power up high, with unbelievably lofty rev ceilings to boot.

For perspective, the F20C found under the bonnet of the S2000 roadster produced 120hp per litre of capacity. That’s 240hp from a 2l engine with a 9000rpm redline. The Ferrari F355 of the time produced 109hp per litre of capacity from its quad cam V8.

Almost every major manufacturer developed their own versions of VTEC subsequently, and it changed the course of combustion engine manufacture forever.

At the time Honda was a brand that was aspirational to the lower end of the market. They were at the forefront of engineering and possessed the quality of a Toyota, but offered more character, driving dynamics and luxury.

Fast forward to the year 2000, and Toyota was outselling Honda by almost 1.5 million vehicles. In fact, it was the biggest selling automotive brand globally at the time. As an outsider this can be attributed to model range – presumably most consumers are looking for conveyances, not sports cars.

The world was hurtling toward the Global Financial Crisis, and despite the newly coined Brand slogan “Power of Dreams”, all performance focused vehicles bar the Civic Type R were discontinued in 2006.

Interestingly, the demise of the Celica nameplate saw Toyota cease production of anything with sporting pretentions in 2006 too. But Toyota’s strong performance continued, with the manufacturer doubling-down on its hybrid propulsion platform until the launch of the 86 coupe: a joint project with Subaru in 2012. Since then, the Supra re-joined the lineup thanks to another strategic partnership, this time with BMW. In 2025, consumers with a penchant for performance also have access to the GR Yaris and Corolla. Toyota figured it out and have gone back to their roots.

Honda on the other hand, has floundered in a seemingly complete disconnect with their heritage. Without hybrid architecture to capitalise on the brand entered bloody Toyota water in the mid-2000’s with nothing to fight with.

The potential for a challenger to take market share was there and the vehicles were not bad, but the strategy was quite simply flawed. The range was marketed at the price premiums commanded by the “old” Honda, but the promise of quality and panache could not be met anymore. In 2010 Toyota global sales soared to 8.4 million, whilst Honda recorded 3.5, a million less than the year 2000.

There was no joy from their offshoot luxury and sports car brand Acura either. Launched in 1986 a few years before Lexus in 1989, Acura remained a largely North and South American fixture whereas Lexus went global. In 2021 Lexus outsold Acura almost 4-fold.

Today the brand is at a crossroads, having sold 4.1 million vehicles in 2024 representing an 11%+ decrease in sales from the prior year. They have re-launched nameplates like the Integra in North America in the form of 4 door hybrids. The market response has been as one would expect, and they don’t have the time or the pockets to ride it out.

Most recently the media has reported their entry into a joint venture with Nissan, another brand that lost its way and is in even more dire need for an awakening. Their focus? on pooling funds and capability to build electrified vehicle platforms…

It’s hard to be positive about the future of Honda. If you’re so lost that you need to partner up with someone to continue that doesn’t say a lot. With that being said, going back to building performance cars as the sole focus isn’t a path to success either, but I can’t help but feel there is a simultaneous loss of heritage and lack of future strategic vision.

The result is the equivalent of chasing one’s tail. If you’ve seen a dog do that, you’ll know what I mean when I say there’s no way forward.