Honda's Slow & Steady Formula

SEE ALSO: Honda Buyers Guide
SEE ALSO: Toyota Buyers Guide
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Washington DC July 9, 2007; The AIADA newsletter reported that no matter how good an automaker you are, it takes a certain amount of time to develop a new car.

Toyota acknowledged that last week, announcing it would add engineers, lengthen its development process, and reduce the breakneck pace at which it's been opening new assembly plants.

According to the Detroit Free Press, by sticking to that same formula, Honda's expansion has been both steady and profitable.

Honda executives told the paper they've avoided the pitfalls of continuous growth by allowing their development process to be dominated by engineers. Also, Honda's relatively small product line allows it to boost sales by moving into new market niches. "We won't chase volume," an executive said. "The Accord's record sales year was 1990. We're perfectly happy with that, but Toyota is adding a second plant to build Camrys."

Honda will face the temptation to pump up the volume as it runs out of new market niches to exploit, but its product planners watch Toyota carefully, and they're wary of hasty growth.