4. Honda Motor Co Ltd (ADR) (NYSE:HMC)
That’s not a misprint! Dominant in the U.S. for decades and a fixture in Chinese and Japanese markets, Honda Motor Co Ltd (ADR) (NYSE:HMC)’s product line is beginning to show signs of weakness around the globe as fresh redesigns from competitors, which offer equal to better gas mileage, are pushing Honda Motor Co Ltd (ADR) (NYSE:HMC) to the limit. In the U.S., Honda’s year-to-date sales growth hasn’t kept pace with Ford or General Motors, while in China ongoing tensions between China and Japan have caused sales growth to stagnate. In its home of Japan, Honda saw sales fall 24% in the first quarter due to the end of subsidies for green cars. Ultimately, Honda is being kicked around by more fuel-efficient engine designs that don’t compromise power (e.g., the Ford EcoBoost) while also losing on the design front. It did recently introduce a redesigned Civic, but I have to wonder if it’s too late to reverse what looks like a downtrend in sales right as Honda is kicking off a major production expansion initiative. Only time will tell if I’m right, but this doesn’t appear to be as strong a brand as it was even three years ago.
Source: Tony Fischer, Flickr.
5. McDonald’s Corporation (NYSE:MCD)
These arches are looking less than golden nowadays with its innovative advantages now lost. Although McDonald’s Corporation (NYSE:MCD) pioneered a healthier fast-food menu including snack wraps, and introduced the value menu, it’s now taking a backseat to differentiable fast-food restaurants like Jack in the Box, which serves breakfast all day, and Chipotle Mexican Grill, whose “Food With Integrity” campaign promises antibiotic- and hormone-free meat and local fruit and vegetable usage for around the same price as what it would cost for food at McDonald’s. What’s really sad is that McDonald’s branded coffee appears to me to be the only factor really softening its recent same-store sales decline, when I’d much rather it be increased foot traffic or new products driving sales. Unless McDonald’s Corporation (NYSE:MCD) can find a new way to shake up the sector, shareholders may have to kiss their superior returns over the past decade goodbye.
The article 5 Companies Losing Their Brand Appeal originally appeared on Fool.com and is written by Sean Williams.
Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.The Motley Fool owns shares of, and recommends, Chipotle Mexican Grill, Ford, and McDonald’s. It also recommends Coca-Cola, General Motors, and Gartner.
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