Building a Network for Auto Sales

It was determined that the U.S. could now support a sales network for automobiles. This was a task with the potential to dwarf anything that American Honda had yet attempted.

The N600 model was launched in Hawaii in December 1969, and in May of the following year American Honda began selling the car on the mainland. Through its motorcycle dealerships Honda had earlier established, a sales network for the N600 gradually expanding to include the three coastal states of California, Washington and Oregon.

Nevertheless, the foundation of America's car market was well established, with customers believing strongly that cars should be purchased exclusively from automobile dealers. Thus began the uphill struggle to achieve respectable sales for American Honda's newest offering.

American Honda began building its own network for auto sales in 1973, when a new model, the Civic, went on sale. At first American Honda's philosophy and corporate activities had to be explained to American car dealers, who had for years been aligned with the Big 4: General Motors, Ford, Chrysler, and American Motors. As a result, that effort proved fruitless. The dealers would say, "We were born and bred in this country, and we know the market and customer better than anybody else." They wouldn't even consider displaying the Civic on their lots.

The American car scene, too, was then dominated by extremely large automobiles. The appearance of a new concept in car design-that of a small, fuel efficient and affordable model-was only seen as an act of defiance.

Yet, amid this highly unfavorable situation American Honda began its nationwide search for sales outlets. The company's sales staff, consisting of a dozen people, each took a territory covering several states. Each of them visited the auto dealers in his territory one by one, giving the same sales pitch over and over.

These efforts soon paid off, and the owners of auto dealerships began including the Civic as part of their product lineups. The affordable Civic, however, was nearly always positioned at the bottom of the product list, and was generally assigned to a lonely corner of their outdoor display lot or the used-car area.

Eventually, a turning point arrived in American Honda's auto sales.

From mid-1973 to the following year, the U.S. auto industry found itself reeling under the effects of the first oil crisis. This prompted American drivers to change perception of what constituted value in a car. No longer so content with large, luxurious "gas guzzlers," they began to see the practical benefits of sensible size and outstanding fuel economy.

In 1974, the Civic placed first in a fuel economy test conducted by the Environmental Protection Agency (EPA). That same year, American Honda began selling Civics equipped with the CVCC engine, the first power plant to pass the strict emissions standards of the U.S. Clean Air Act. Thus, the Civic became America's leader in both fuel economy and low emissions. These qualities, together with its fine performance, helped the car win a broad base of support. Immediately, sales began to pick up.
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<< Achieving a Breakthrough in America
<< Building the Honda Sales Network
<< A Wind from the West, Blowing Across the American Landscape
<< Selling to America ... with Eight Employees
<< Problems with the Main Product
<< The Motorcycle as Popular Product
<< Changing the Image of an Entire Industry
<< Nicest People Campaign Causes a Sensation
<< Coping with a Sales Slump in the Mid-60s
<< Building a Network for Auto Sales
<< Satisfaction: Our Own Customers, Our Own Work
<< American Activities Take Root

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