In Frankfurt, Honda unveiled its new Urban EV concept, which I think was actually my favorite car from what turned out to be a very decent show, despite nine manufacturers sitting it out this year. It brought to mind the 2008 Los Angeles Auto Show, which I attended on the only press pass I’ve ever been given, and where I saw the unveiling of the original electric Mini. The similarities are obvious - a small two door hatchback with quirky retro styling and an electric motor of unknown range or output.
Honda N400, image courtesy hiveminer.com
But it’s where the differences are that I think make the Urban EV a bit of a turning point for Honda, or at least it could be if they read the market and handle it correctly. Unlike Mini, Honda isn’t known for its retro styling and quirkiness. It’s just about as mainstream as it comes, so when they unveil a car that harkens back to their 1969 N400 or even 1972 first generation Civic, you know that there has been a change in the mindset in the design department that allowed such a radical departure not just from Honda’s current design language, but from the body styles of most electric vehicles we’ve seen to date. The Prius, the Leaf, the Bolt and Volt, and countless other hybrids and EVs all share the 4 door liftback look that is designed to maximize aerodynamics but, as a consequence, minimizes visual interest. The Urban EV, on the other hand, takes aerodynamics and throws a fat brick-shaped car with traditional proportions and a modern take on retro styling at it, shattering the stereotypical “green car” design. You might expect that from Kia or Jaguar, but not good old mainstream Honda. Sure, they tried and failed with the CR-Z to shake up the hybrid game, but surely they’ve learned their lesson from putting out a half-baked product bathed in nostalgia.
According to a recent and excellent article by Reuters, Honda has learned a lot of lessons lately that they are looking to act on and move on from, which makes the Urban EV even more relevant as a potential turning point. If you have the time and interest, by all means read the full story on Reuters, but the major theme of the story is that Honda lost their character in the pursuit of shareholder value.
Starting around 2003 under new Chief Executive Takeo Fukui, Honda began allowing the accountants to dictate design and kept tightening the purse strings until the cords snapped. Rapid cost cutting and unreasonable budget goals forced designers to reel in not just creativity, but luxury and, as their competitors surged forward to meet the standard Honda themselves helped set, Honda was stepping back to ensure greater returns and provide greater value to shareholders. The company rested on its laurels, which ultimately cost them their coveted Consumer Report’s “recommended” status, leading to costly redesigns just to catch up with the competitors they allowed to pass them.
Executives at the time claim they were trying to be too much like Toyota, whose market share has always eclipsed Honda’s, but that’s an excuse I don’t buy. While Honda was scaling back, Toyota was scaling up, coming out with vehicles like the FJ Cruiser and the MR-2 Spyder while totally refreshing the Tacoma, Tundra, 4Runner and Camry. If Honda had been trying to be Toyota, they would have been pushing the envelope rather than rubber stamping all old models and sending them out the door with minor facelifts and cheaper interiors.
So it comes down then to shareholder greed and trying to maximize profits on the back of prior successes. But one need only look at this year’s developments in the stock market to prove that Honda could have continued to innovate without sacrificing value. Tesla, without making a single Model 3, at one point in 2017 had a consistently higher market value than General Motors, and they did so based on innovation and market disruption. If Honda’s looking for inspiration on how to provide value without sacrificing character, they need to be looking at Tesla, not Toyota.
Fortunately for Honda, their current CEO, Takahiro Hachigo, gets it. He’s unshackled the designers and is encouraging collaboration across their global studio locations not to find the cheapest way to make the same car they have been, but to find the best car they can make to meet the evolving needs of consumers. This not only creates shareholder value as a market leader, it honors Honda’s tradition of innovation.
Which leads us back to the Urban EV concept. A funky city car that checks a lot of boxes for today’s young car buyers. No, it’s not a compact crossover, but maybe it has enough character to convince buyers they don’t actually need an elevated ride height and compromised handling characteristics if they’re just using it to get to Whole Foods and back. And since the platform is flexible, if Honda wants to make an Urban EV CUV, they’ll be able to. They’ve already announced an electric sport coupe that will be based on the Urban EV, so, at least from an enthusiast perspective, Honda looks like they’re finally heading in the right direction. Forward.
By Devlin Riggs
This article originally appeared as a Deep Dive segment on the AllWaysDrive Podcast. Subscribe today!