Acura Plans to Limit Sales to No More than 800/Year

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Acura Survives Near-Death to Seek Salvation in SuperCar
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Acura’s future was so dire 4 years ago that Honda Motor Co. (HMC) began killing models and choking off product development. Now, Honda is putting $1 billion into its luxury brand, a perennial also-ran to Toyota Motor Corp. (TM)’s Lexus line.

Honda’s latest attempt to give Acura purpose is a parade of new products, including the flagship RLX sedan, an MDX sport wagon and the return of the NSX super sports car, priced above $100,000. Its goal is to tailor Acura to the tastes of the U.S. buyers it covets.

The product push this year comes after Acura’s U.S. sales have fallen 25% from a peak of 209,610 in 2005. Though Honda was the 1st Japanese automaker to sell a luxury car in the U.S., Acura never reached the peaks of Toyota’s Lexus line, the top-selling luxury brand in the U.S. from 2000 to 2011. And Acura has never captured the cachet of German luxury cars, forcing Honda to sell its upscale models on the cheap.

Acura’s “biggest negative is we are known as a value company in the premium space,” Mike Accavitti, Honda’s U.S. marketing chief, said in a Detroit interview last month. “What we have to do from a marketing perspective is ramp up the emotional element.”

Honda’s effort to elevate Acura shows how important -- and competitive -- the luxury segment has become for carmakers worldwide. Luxury sales have increased as the U.S. economy has improved and upscale cars provide generous profits and prestige that serve as a halo over an automaker’s entire model line.

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Valuable Sales

Luxury autos account for 12% of global sales, “but are almost 50% of industry profits,Johan de Nysschen, president of Nissan Motor Co. (7201)’s Infiniti luxury line, said in a briefing last month in Detroit.

Honda has jumped 50% since Nov. 14 as the yen has weakened. Even so, investors are willing to pay a smaller premium for Honda’s revenue compared with BMW’s sales than they have for most of the past decade.

Four years ago, Honda’s then-president, Takeo Fukui, reviewed the expansion plans for the company’s lagging luxury line. At the time, Acura’s U.S. sales were plunging by almost half, to 105,723 in 2009, as the recession ravaged auto sales.

So Fukui took a red pen to Acura’s budget. He scrapped plans to create an Acura dealer network in Japan. He killed development of a new NSX model with a massive V-10 engine. He also canceled plans to emulate German luxury cars by outfitting Acuras with V-8 engines and rear-wheel-drive vehicle platforms.

U.S. Focus

Now, Honda is turning in a different direction from its German competitors. Acura won’t chase the money in emerging markets such as China. Instead, it will try to restore Acura’s credibility as a technology leader in the U.S. and finally emerge from the near-luxury bargain basement.

Acura “will remain a U.S.-centric brand,” John Mendel, Honda’s U.S. sales chief, said in an interview in Orlando, Florida, this month.

Honda, known for efficient product development, is overhauling Acura’s lineup for what some automakers could spend on 1 model, said Rebecca Lindland, auto consultant with Rebel 3 Media & Consultants in Cos Cob, Connecticut.

“If they can revamp the lineup for $1 billion, that’s money well-spent,” Lindland said.

In the U.S., auto sales have been growing by 10% a year since 2010 and disposable income tops $12 trillion, dwarfing what Asians and Europeans have to spend. The U.S. is also the market Honda knows best. The Tokyo-based company derives more than half its sales and profits from North America. U.S. drivers accounted for 89% of 2012 Acura sales, the company said.

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Design, Assembly

Acura’s design studio is in Torrance, California, on the campus of Honda’s U.S. headquarters. Most Acura models are built in North America, and the company is preparing to build the NSX in Ohio.

“Honda really does its homework; they’re really in touch with U.S. consumers,” Kevin Tynan, Bloomberg Industries auto analyst, said Feb. 19. “But Acura is as anonymous as you can get. A lot of people don’t even know the relationship between Acura and Honda.”

Jeff Durgin, the president of a New Jersey construction equipment company, bought a $39,000 Acura TL in 2009 because he had owned 8 Honda models. He kept the TL only a year and replaced it with Hyundai Motor Co. (005380)’s upscale sedan, the $41,000 Genesis, with a 429-horsepower V-8 engine.

“The Acura was a good car, but the ride was pretty rough and the styling was terrible, with a big duck bill on the front end,” said Durgin, 48. “It seems like Acura has lost its way.”

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Anime Beaver

The angular grille Acura began affixing to its models in 2008 turned off owners, including Michelle Krebs, an auto analyst for researcher Edmunds.com who used to drive a TL. Auto reviewer Dan Neil, then of the Los Angeles Times, wrote that the grille, which Acura has since softened, made the TL look like “a very large anime robot beaver.”

“Acura’s designs got very funky,” said Krebs, based in Royal Oak, Michigan. “They tried to make their designs different to stand out, but they ended up looking quirky.”

Acura commands the lowest prices among major luxury automakers in the U.S., according to Edmunds. The Acura TL sold for an average of $36,657 last year, almost $7,000 less than a BMW 3 Series, a slightly smaller model, and $3,000 less than a Mercedes-Benz C-Class and Lexus ES 350, according to Edmunds.

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NSX Halo

Accelerating Acura starts with the comeback of the racy NSX, which goes on sale in 2015 and Honda promoted in a Super Bowl ad starring comedian Jerry Seinfeld last year. When Acura introduced the $89,000 2-seater in 1989, driving enthusiasts embraced it for the speed it generated from a powerful V-6 engine mated to a lightweight, all-aluminum body. Once so hot, the NSX starred in director Quentin Tarantino’s 1994 hit “Pulp Fiction,” driven by Winston “The Wolf” Wolfe, played by Harvey Keitel.

Acura stopped building it in 2005.

The NSX is being reborn as an all-wheel-drive hybrid, with a V-6 augmented by electric motors to generate the speed of a V-8, Honda said. It will be so fast that Honda intends to race it in 2014 when the Grand-Am Road Racing and American Le Mans Series merge, said T.E. McHale, a spokesman for Honda’s motor sports unit. Honda has said the new NSX will race in Japan’s Super GT circuit.

Honda is hoping that by reviving Acura’s halo car, it can draw buyers to showrooms, even if they drive home in another model. Aiming for waiting lists, Acura will limit sales of the NSX to no more than 800 models a year, Mendel said.

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Broader Appeal

Convincing NSX shoppers to settle for an Acura sedan or SUV might be a tough sell, Tynan said.

“I’m not sure a $100,000 halo car is going to get people to say, ’I get Acura now’,” Tynan said.

While the NSX is designed to lead Acura’s style renaissance, the sales recovery must come from the RLX, which replaces the slow-selling RL, the MDX sport-utility vehicle, and a new mid-sized sport sedan that will replace the TL model, Mendel said.

Executives in Japan want U.S. sales for the premium brand to grow to as much as 20% of Honda’s total deliveries, up from 11% last year, said Koji Endo, managing director at auto analyst Advanced Research Japan. Akiko Itoga, a Honda spokeswoman, declined to confirm that target.

That would suggest that Honda is aiming to boost Acura sales by as much as 82%, to a record 285,000 from last year’s total of 156,216. Mendel said Acura’s U.S. sales goal this year is “about 180,000 to 180,000-plus.”

Below BMW

That would leave Acura still trailing luxury leaders Bayerische Motoren Werke AG (BMW)’s BMW, which sold 281,460 models in the U.S. last year, Daimler AG (DAI)’s Mercedes-Benz, which had 274,134 U.S. sales in 2012. Globally, BMW sold 1.54 million models last year, Volkswagen AG (VOW)’s Audi luxury line sold 1.46 million vehicles and Mercedes had 1.32 million worldwide sales.

When Acura arrived in 1986, it was meant to showcase Honda’s engineering excellence taken to a higher level, symbolized by an angular A logo evoking an engineer’s calipers on the front of every model.
27 years later, Honda continues to struggle to reach the highest level of luxury with Acura. And it is losing buyers like Chicago marketing executive George Schaumann, who owned 4 Acura models before he left the brand in September to buy a $45,000 Audi Q5 SUV.

“I’d be lying if I didn’t say I feel good about driving an Audi,”
said Schaumann, 53, who traded in a 2010 Acura MDX for the German luxury model. “Acura is kind of stuck in Honda’s shadow, with designs that don’t make me think of prestige.”

To contact the reporter on this story: Alan Ohnsman in Los Angeles at [email protected]

To contact the editor responsible for this story: Jamie Butters at [email protected]
 
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Interesting. Part of the problem is all these "experts" and "consultants" that are quoted all over this article. From all I have seen, for the most part, they don't know shit. These aren't car people. They are some analyst or executive who filled out a résumé and got a job at a marketing/consulting company and now they are responsible for telling Acura what to do. These are the people responsible for shifts in the company's direction with feedback like "your car's need to stand out more" followed by "your design has gone too far people don't like the beak". Suddenly car making becomes a mess and all complicated and a company as large as the Acura division loses its way and sales. Someone needs to tell them this:

Make good, interesting, fun cars. Forget the marketing people and all these analysts. Get some good designers. If Kia's can look this good, why can't Acura? If they can hire an ex audi designer why can't Acura? That RLX is still lame looking. It's still a V6 trying to compete in a V8 segment. What's new? LED headlamps will only take you so far. If you have a very cool AWD and steering system, put it in a car that also looks sexy and has a V8. Let your strengths make sales for you over the Germans. Those are dependability and reliability, low depreciation, high residuals. Those qualities will help you when all else is equal. Not when you have to choose ugly over pretty, v6 over a V8, and a lost brand name over one with caché.
 
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The article is fair and balanced. For years Honda/Acura have staked a position that they will be as environmentally efficient as possible with their products hence why they continue to squeeze more performance from a V6 instead of using a detuned racing V8 engine from their stable.

You may not like Acura's business model/marketing niche but at least it is true to what they claimed. The issue as I see it is more in the styling of their models than anything else. As the article noted aptly, Acura is seen as a value car (noted it in another thread!). But Acura needs to step away from Honda's shadows - which they did in the early years.
 
Going to be interesting to see what Mercedes (with their FWD architecture) and BMW (with the low end 320 3 series) will do to Acura. I believe it will clobber the entry luxury segment that Acura currently lives in. The CLA is generating alot of buzz, as does a $30k BMW.
 
Convincing NSX shoppers to settle for an Acura sedan or SUV might be a tough sell, Tynan said.

“I’m not sure a $100,000 halo car is going to get people to say, ’I get Acura now’,” Tynan said.
Yeah, this. Hopefully they will release the mini-NSX to help with sales.
 
First of all, Acura needs to stop losing the comparison tests. It needs to win a few COTY awards. Maybe they think those don't matter but those are the things that raise your brand value.

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Yeah, this. Hopefully they will release the mini-NSX to help with sales.

Of course the NSX can't do it alone. But it is a big part of the puzzle. The GT-R has done a lot for nissan. Lexus has an LFA, Nissan has the GT-R, Acura has a jazzed up CRV called the RDX.
 
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I do note that despite all the rhetoric from Honda, they have yet to contact existing NSX owners about the new model.
It's really amazing when you think that selling a new product to an existing customer is the second easiest sale you can make, and rewards the current NSX owner for buying an Acura.

At the moment we have a chaotic plan with different dealers running different programs, at least one dealer telling an owner there will be over list price gouging supported by Honda.

Meantime Honda marketing VP Mike Accavitti talks about moving Acura up market but so far can't seem to construct a professional product launch.
Do you think Ferrari, Porsche etc would have a new model and not even have the courtesy to promote and offer it to existing owners?

Accavitti's actions to date suggest they are going to sell it like a Civic, on a first come, first serve basis.
This approach will ensure the new NSX loses it's exclusivity as quickly as the first one.
A very amateur approach
 
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Yes God dammit! Say it like it is Jim! Amateurs!!! where was my letter and phone call? LOL....

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I mean I am laughing but it is totally true. You own an original 91. Bought new. I own the last model they made. A 2005. Has anyone contacted us? No...

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I know someone from Honda reads this forum.
 
Yes God dammit! Say it like it is Jim! Amateurs!!! where was my letter and phone call? LOL....

- - - Updated - - -

I mean I am laughing but it is totally true. You own an original 91. Bought new. I own the last model they made. A 2005. Has anyone contacted us? No...

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I know someone from Honda reads this forum.

Might be they think the old NSX owners can't afford it , but it's crappy of them not to reach out anyway.

Plus "limiting sales" on a car you don't even know how many you'll get orders for is kinda backwards. More than likely they're saying this to cause demand as it this point all we know is it's a V6 hybrid that looks really good. It's the most exciting thing they have and have coming. Mini NSX is still just rumors. Hell even this one doesn't have any confirmed numbers yet. They keep teasing but no performance info.
 
Interesting. Part of the problem is all these "experts" and "consultants" that are quoted all over this article. From all I have seen, for the most part, they don't know shit. These aren't car people. They are some analyst or executive who filled out a résumé and got a job at a marketing/consulting company and now they are responsible for telling Acura what to do. These are the people responsible for shifts in the company's direction with feedback like "your car's need to stand out more" followed by "your design has gone too far people don't like the beak". Suddenly car making becomes a mess and all complicated and a company as large as the Acura division loses its way and sales. Someone needs to tell them this:

Make good, interesting, fun cars. Forget the marketing people and all these analysts. Get some good designers. If Kia's can look this good, why can't Acura? If they can hire an ex audi designer why can't Acura? That RLX is still lame looking. It's still a V6 trying to compete in a V8 segment. What's new? LED headlamps will only take you so far. If you have a very cool AWD and steering system, put it in a car that also looks sexy and has a V8. Let your strengths make sales for you over the Germans. Those are dependability and reliability, low depreciation, high residuals. Those qualities will help you when all else is equal. Not when you have to choose ugly over pretty, v6 over a V8, and a lost brand name over one with caché.

Oh yeah Dave they're going to be charging $70k for that RLX to compete with the V8's
 
Well they are racing it in ALMS and JGTC it can't be all that slow unless the race cars are just completely different.
 
Don't know. It's weird but it's on sale and NO ONE has any confirmed performance figures yet
 
Might be they think the old NSX owners can't afford it , but it's crappy of them not to reach out anyway.

Plus "limiting sales" on a car you don't even know how many you'll get orders for is kinda backwards. More than likely they're saying this to cause demand as it this point all we know is it's a V6 hybrid that looks really good. It's the most exciting thing they have and have coming. Mini NSX is still just rumors. Hell even this one doesn't have any confirmed numbers yet. They keep teasing but no performance info.

I really like the idea of limiting the supply.
Nothing keeps a car's exclusivity more than a strong wait list.
Ferrari sold just over 2000 cars in all models in the US last year.
Selling 800 NSX's in the US for one year may be easy, but selling 800 per year every year may not be quite as easy.

I would have imagined a marketing program where the new NSX is hard to get with supply and demand closely managed.
The first production sold to existing NSX owners first, existing Acura customers next, and then the general market.
Would be a nice reward for an Acura customer to have the first one on the block no?
 
And no sales to Brittney Spears, Lindsey Lohan, Christina Aguillera, Paris Hilton, Etc.
 
JD,

In reference to Acura reaching to current owners of the NSX. They have. Twice. There have been two recent surveys released to current owners of NSX's asking questions regarding the upcoming NSX. The questions are interesting and, to me, seem to be used to answer internal debates the engineers/planners are having regarding the direction of the new design. Personally, I wish the surveys had some room for free-form comments, but they didn't. My guess is that more surveys will sent as more questions surface internally.
 
And no sales to Brittney Spears, Lindsey Lohan, Christina Aguillera, Paris Hilton, Etc.
Why not? Let them deal with issues like snap ring, etc. first (and it's not like they couldn't afford to buy one off an initial buyer if they really wanted to be seen in one). I'll wait for the bugs to get worked out. ;)

As far as contacting original owners, keep in mind that the initial sales are at least a year or more away. Did Honda start taking deposits over a year before the first 91 NSX was sold? I think some dealers did, but I don't think it was an official Honda pre-sales effort.
 
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ILX is a mistake for a car that is pretty much a civic like the old 4 door integras which didn't sell much
RLX MDX is another design mistake, the article mentions the front beak which was a mistake but its on all the upcoming models still
NSX is being launched at the same time as the next Enzo replacement which has v12 with electric motor and Mac P1 with v8 turbo with electric. For all the RD they spent on the v10 coupe concept they should have dropped the v10 in the next NSX. The only thing Honda did was sent out a survey about them being in racing series. Every sports luxury brand out there gives a private viewing of the replacement car but we all got to see it during the superball instead like everyone else.
I am never selling my NSX but I doubt I will ever buy another Acura. At this rate Acura will be no longer in 10 years.
 
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I think Honda/Acura has gotten away from what made them great. Nothing about the new Nsx makes it any better then anything else on the market. This want the case in 1991. The new models are boring. I can't see the new Nsx doing well. The first year they will sell but after that I can't see them selling. There is stiff competition out there and what once made the Nsx great was being better then the rest
 
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I'm still a skeptic that we will have a ready for mass market niche halo car at all.....:frown:
 
800 a year is not from Honda, and I'm pertty certain that if they can move more than 800 a year, they will.

The original NSX was slated for 24 cars a day, and they doubled it due to demand the first year. If there is money to be made, they'll be stupid not to produce the car.

Than again, if the car don't deliver in performances, no one will by it.

It has to best the GTR in every aspect other than interior space.
 
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