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Honda vs Toyota

Both the automobile giants have been hit hard by the financial crisis. But whose cars are people driving?

Both Toyota and Honda have just announced that their US sales have fallen by more than a third in December. Sales at Toyota, Japan’s No. 1 car company, slid 37 percent, while sales in Japan’s No. 2, Honda, tumbled 35 percent during the month.

“The best thing about 2008 is that it’s over,” Jim Lentz, president of Toyota’s US sales unit told Bloomberg on Monday. “We’re in the middle of the most challenging, volatile market we’ve ever faced.”
The Japanese car makers, like the rest of the global auto industry, have been very badly hit by the recent economic slowdown. Toyota’s sales fell 15 percent in 2008, its first such decline since 1995. And Honda, which has not posted a drop in the market since 1993, fell by 7.9 percent in the year.

Honda cut its annual operating forecast by 13 percent and also recently announced its withdrawal from Formula One because of the global financial crisis. “Market conditions have turned much worse than we had anticipated,” Honda executive vice-president Koichi Kondo told a news conference in Tokyo in October last year. “Next year (2009) is going to be very difficult to read.”

Toyota was founded by Kiichiro Toyoda in 1937 in Japan, two years after he built his first car. The company began to produce cars, trucks, vans and SUVs, expanding rapidly through the years. One of Toyota’s notable achievements was the creation of the high-end luxury brand, Lexus.

Its rival, Honda, came a few years later. Soichiro Honda first established the Honda Technical Research Institute in 1946 to develop and produce motorbike engines. In 1948, Honda Motor Company was founded. Honda then joined forces with finance expert Takeo Fujisawa to build up the company.

Toyota’s mission statement is “to sustain profitable growth by providing the best customer experience and dealer support,” while Honda’s mission is to maintain a global viewpoint, and remain dedicated to supplying products of the highest quality, yet at a reasonable price for worldwide customer satisfaction. It says.

The transportation sector is one of the main reasons for the production of carbon dioxide, the greenhouse gas that is a major contributor to global warming. In the hopes of preserving the environment, Honda has introduced a new generation of gasoline engines that have “extremely low emission levels and increased fuel efficiency,” and three types of “environmentally friendly” cars. One runs on compressed natural gas for near-zero emissions, another runs on electricity, and the third is powered by fuel-cell technology.

Like Honda, Toyota has also produced hybrid vehicles and cars run on fuel-cell technology. The company implemented its five-year Environmental Action Plan in 2005, which aims to reclaim and recycle products at the end of their life.

Originally introduced in 2000, the Prius is the company’s most popular hybrid car.

Presence in the Middle East
Honda and Toyota are available everywhere in the Middle East and have done well winning over drivers in the region. North America, Europe and Japan are facing high energy prices that have greatly affected the automobile industry, but according to the latest figures, automakers are doing very well in the Middle East.

Toyota recorded January-to-June 2008 sales of 260,000 units in the region, up 31 percent from the previous year (and making it the best-selling car company in the Gulf). The latest count of units sold by Honda is 50,000 units in 2007. Honda expected sales of 65,000 units of “passenger-car vehicles” in the Gulf in 2008.


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