Why Has Nissan Succeeded Where Honda Has Not?

The primary problem facing management in the Honda in Europe case is Honda’s inability to thrive, compete against the competition, and integrate itself in the European automotive industry. Honda management needs to reassess their marketing strategy. Competitors like Nissan and Toyota have successfully integrated their products into the various European cultures long before Honda made a move. Honda needs to reevaluate what their vehicles can do for Italy or for Germany or for France and less of how to come up with the latest innovative technology. The key for Honda now is understanding consumer desires. Honda has strengths in their environmental capabilities and their strong reputation but their lack of understanding for the consumer is what is holding them back from thriving and winning against the competition.

1. Why has Nissan succeeded where Honda has not?

Nissan entered the European auto industry in 1962- much earlier than Honda. They used a merger strategy to gain insight into the European market and gain a distribution center. In 1984, they created a new manufacturing center in the United Kingdom and in 1989, they established a headquarters in the Netherlands. Nissan used these facilities to learn more about the European market and the various cultures in Europe which allowed them to bring consumers specialty vehicles to meet their needs. Honda, on the other hand, had no such facility or recognition until 2003 and even then, the research was focused more on development of the company and their products rather than consumer tastes.

Nissan ultimately progressed through Europe much quicker than Honda as well. In an alliance with Renault in 1999, Nissan was able to make its way into the French market. Renault relieved Nissan’s debt by purchasing over 40 percent of Nissan’s stock but they also acquired Nissan’s quality technology and reputation. Ten years later, Daimler became part of the alliance at which point, the three companies together held the third biggest market share in Europe.

Nissan succeeded in Europe and Honda did not for a plethora of reasons. Because Nissan entered the market earlier, they were able to set a reputation for themselves and branch out much more quickly than Honda. By analyzing and researching the consumers with which they wanted to target, their products did better because they knew what the people actually wanted rather than researching the auto industry internally, like Honda. On top of all of this, Nissan developed a very strong alliance that helped it grow and thrive in Europe whereas Honda did not.

2. Where should Honda’s European cars be produced?

Honda’s European cars are currently being produced in the United Kingdom, which uses the British pound and should be produced in Germany, which uses the Euro like