Ridgeline at Risk?

Recently several automotive publications have hinted that Honda may soon discontinue its innovative Ridgeline mid-size pickup.  Dodge just discontinued its like-sized Dakota.  Honda says it has no official plans to do so and just added some minor tweaks to the 2012 model.  Compete prepared a quick look at Ridgeline to inform Honda’s thought processes.  The analysis leverages Compete’s proprietary in-market automotive shopper metrics, which are based on unique consumers (i.e., no double-counting of consumers doing the same activity more than once in the same month). Those metrics in turn leverage Compete’s patented normalization technology.

Ridgeline & Dakota Shoppers Over Time

Vehicles are typically discontinued for lack of sales, profits, or both.  The ultimate pre-cursor for retail sales is in-market shopper volume.  The chart below shows monthly Ridgeline and Dakota shopper volumes since 2006.    Ridgeline and Dakota have followed the same path—with significant drops in shopper volume since early 2006.  Part of the decline through 2009 could be attributed to recession-driven declines in shopper volumes market-wide.  However, the market has steadily recovered since 2010 (not shown) yet both vehicles’ shopper volumes have remained relatively flat.

September in Context

Looking across all larger pickups, Ridgeline and Dakota each nearly trailed the set in September; only Nissan’s Titan has fewer shoppers (below).  Light-duty versions of Ford’s F-Series had over 80,000 shoppers and Silverado over 60,000.  The good news for Ridgeline is that there are in-market pickup shoppers.  The bad news is that they are not shopping Ridgeline, and even if all Dakota shoppers became Ridgeline shoppers, the benefit to Ridgeline would be relatively small.

Surf or Wax Your Board

Unless Honda is content with current Ridgeline sales volumes, it has work to do.  CY2011 sales averaged about 1,000 a month before this year’s earthquake disrupted supplies, and totaled about 16,000 for all of 2010 (vs. 50,000 in 2006—on peak shopper volumes).   So what can Honda do?

  • Be content with very low sales and do nothing (maybe buying time until a rumored smaller, CR-V-based pickup is launched).
  • Push Ridgeline fleet sales (likely a past destination for many Dakotas)
  • Reverse engineer how many shoppers would be needed to reach sales goals, and then determine ad spend needed to generate those shoppers.  Then get on the advertising!
    • Spend needed is calculated based on Ridgeline, and/or segment cost per shopper, and multiplying that by the number of shoppers needed.

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About Lincoln Merrihew:
Lincoln Merrihew is the Vice President of Transportation at Millward Brown Digital. At Millward Brown Digital, Lincoln is responsible for steering the Transportation Team, which encompasses the automotive and travel practices. Before Lincoln joined the Millward Brown Digital team, he worked at TNS Custom leading the Automotive team, and then continued on there to lead business development for 10 different industry verticals. Lincoln's career aspiration is to create game-changing solutions and insights. Connect with Lincoln on LinkedIn.