Stagnant products, not lack of demandPosted: August 30, 2011
With the Mazda RX8 being phased out this year for reasons concerning a “lack of demand”, one must wonder what has gone wrong. The RX8 is a car that had some pretty decent sales numbers early on. Its sports car dynamics with a practical twist gave it much appeal for many people. Yet, today, in 2011, the demand has fizzled out, and I expect the reason is similar to two past offerings from Honda that shared a similar fate.
The Honda NSX and the Honda S2000 were both fantastic sports cars with solid appeal, just like the Mazda RX8. Both companies saw failures in later demand with these cars though and took the problem to be a lack of appeal in such sport-focused cars. In fact the real problem is much more simple than that because demand for fun cars is not dwindling at all by many accounts. This is really just a simple case of overstaying your welcome.
Back in the early 90s Honda built the NSX supercar to take on the Ferrari 348. At the time the NSX showed itself to be a fierce competitor and people were in disbelief of the fact that Honda could actually compete with the likes of Ferrari. The NSX really was earth shattering in its day, as a $90,000 Honda. However, as time progressed, Ferrari’s V8 cars evolved, getting better and more powerful. The NSX remained the same, not evolving to stay competitive in its market. The NSX had a 15 year production run; it was born a legitimate supercar rival and died unable to outrun cars that cost a third of its price. Of its 15 year run, it was only a real contender until around 2001, where it could at least compete with a Porsche 911 until the second generation 996 came out. Those extra 4 years of production, where it was not competitive, killed the car.
A similar story is true of both the Honda S2000 and the Mazda RX8. Both are great overall sports cars that have a lot to offer their driver. They even had around the same amount of power, and were not far off on weight either. It is not what they offered that ruined their demand, it is the fact that they never changed during their long production runs. The S2000 was altered in some aspects in 2004 (bigger engine, better transmission, etc), but the overall car stayed the same despite these changes, not even a power bump was given. The RX8 is a similar story where it never gained power (while already underpowered for its market), and only received a minor facelift. Neither of these cars were improved enough to make people want to buy the new one. Instead people who bought one a few years earlier just held on to the cars they had.
The S2000’s demand issue could have been solved simply by holding the engine in the second-generation car to the same efficiency standard as that the first. That would mean a power bump to 260-270hp over the 240hp made by the first generation car. With a decent power bump like that the second generation S2000 would have had much greater appeal over the first generation car, but instead they just let it stagnate.
The RX8 needed to have a larger rotary or a twin turbo version. At 240hp it was significantly underpowered when compared to the Nissan Z, Mustang, Evo, and STi. If it can do 240hp on 1.3L then 1.8-2.0L should be able to see around 300hp, which is what the RX8 needed all along.
So with these three cars (there are definitely others too) we can clearly see how not keeping things fresh every few years has a seriously negative effect on demand. So this is a lesson for all companies, especially Honda (who has two strikes), that they need to put in the effort to make their products as good as the consumer expects them to be. Simple business lesson, If they are not buying your product then you need to make it better. This really is not that hard, I’m not sure how such basic concepts manage to escape all of these product development people. It is definitely not a lack of demand for sports cars at all, they just seem to want to avoid admitting to their own mistakes. Hopefully they will learn, but I don’t have much faith they will; which is a shame because Honda and Mazda can really make some awesome cars.