IBJNews

Honda has high hopes for new Acura model made in Indiana

Back to TopCommentsE-mailPrint

Honda Motor Co., seeking to revive its Acura luxury brand, is introducing a sedan intended for younger buyers unable to afford higher-end autos. It’s part of an effort to improve Acura’s image with new models.

The compact ILX is aimed at “Generation-Y” drivers who are turning 30, Honda said at a briefing in Las Vegas this month. The sedan will start “well under $30,000” when it goes on sale in early 2012, and will be shown next month at the Detroit auto show, said Vicki Poponi, assistant vice president for product planning at Honda’s U.S. unit.

The ILX will be built at Honda’s Greensburg plant in Indiana, which makes Civic compacts. The plant, less than an hour southeast of Indianapolis, doubled employment to about 2,000 workers earlier this year to prepare fro production of the new model.

“The brand is in trouble,” said Jessica Caldwell, an analyst for researcher Edmunds.com. “The consensus for many of the current models is the vehicles just look bland. They have to do something to capture peoples’ emotions with styling.”

Acura, like the Honda brand, is struggling this year from reduced production triggered by natural disasters and a model line that hasn’t drawn as much attention as those of Volkswagen AG’s Audi, Bayerische Motoren Werke AG’s BMW and Daimler AG’s Mercedes-Benz. Acura sales slid 6.7 percent through November, compared with gains of 15 percent for Audi, 12 percent for BMW and 12 percent for Mercedes’ luxury models.

With its new models Tokyo-based Honda plans to tout Acura’s lineup as “smart luxury” vehicles that combine fuel efficiency, driving performance and value for money.

Sales for Acura will rise in 2012, buoyed by the ILX and a revamped RDX compact utility vehicle that’s also to be shown in Detroit in January, said John Mendel, Honda’s executive vice president of U.S. sales.

Honda expects to sell 40,000 ILX sedans annually. Acura brand sales totaled 110,170 this year through November. Mendel declined to provide Acura’s volume goal for next year.

While baby boomers account for the majority of luxury sales, Acura is preparing for their children, who are entering the auto market, said Michael Accavitti, Honda’s vice president of U.S. marketing. The group, born since about 1980, covers as many as 80 million people, he said.

“Gen-Y consumers aspire to luxury still, but they need some help getting there,” he said. “They are projected to be the first generation in the modern era to earn less than their parents.”

The ILX will be available with three powertrain options: a 2-liter engine with an automatic transmission; a sportier 2.4- liter, manual transmission model; and a hybrid version with a 1.5-liter engine, Poponi said.

The revamped RDX also goes on sale next year, receiving a new V-6 engine in place of its current turbocharged 4-cylinder model. The new version will have both higher horsepower than the current RDX and “much improved” fuel economy, Poponi said.

Acura also plans other, more expensive models as it revamps its lineup.

A concept version of the NSX, Acura’s two-seat supercar that left the line five years ago, will also be shown in Detroit. A concept version of the RL, Acura’s current top-end sedan, will be shown in New York in April, Poponi said.

The mid-engine NSX is to be the brand’s “halo” model, equipped with a new “sport hybrid all-wheel-drive” system for high-performance driving and fuel-efficiency, said Gary Evert, division leader for Acura research and development.

The NSX should go on sale “within three years” and probably can’t be sold for “less than $100,000,” Tetsuo Iwamura, Honda’s chief operating officer for North America, said in an interview in Las Vegas, without elaborating.

“It’s definitely never a bad thing for a brand to have a high-dollar sports car, but the critical thing is RL,” said Ed Kim, industry analyst for AutoPacific Inc. in Tustin, Calif. “Acura has never achieved the status of the other Japanese luxury brands, mainly given the lack of a truly premium sedan.”

The current RL, starting at about $48,000, isn’t competitive with rival luxury sedans because “it’s grossly undersized for the segment,” lacking the roomy back seat expected by buyers of BMW’s 7-Series and Toyota Motor Corp.’s Lexus LS, Kim said.

That will change with the new RL, which will go from having “worst-in-class legroom to the best-in-class,” Poponi said. The new version will have BMW “7-Series cabin space, with the agility of a 5-Series,” she said.

After its 1986 start as the first premium Japanese auto line, Acura grew rapidly on U.S. demand for entry-level Integra sedans and midsize Legend sedans.

Acura has been on a “wandering road” since the 1990s, Jeff Conrad, the brand’s manager, said in Las Vegas. That’s the result of “inconsistent” product introductions, he said.

Sales peaked in 2005 at 209,610 on demand for Acura’s MDX sport-utility vehicle and midsize TL sedan.

“Acura is almost restarting themselves back to square one, and that’s not a bad thing” said Edmunds’s Caldwell. “But at the end of the day, styling is also critical, so if it’s not a nice-looking car, no one is going to buy it.”
 

ADVERTISEMENT

  • US builders/quality
    Ever since the Japanese manufacturers began building in the US, their quality has dropped. Look at recent Consumer Reports ratings, that tells the story.

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. As a St. Vincent employee of over 20 years, I am saddened and disheartened by this announcement. Unfortunately, as the healthcare "industry" continues on this political and corporate path, all that St. Vincent Hospital has stood for spiritually for its employees and this community is being sucked dry. I know it truly has no choice. It is not just Obamacare or just competition or just any single thing. This trend started long before I was even born when the government became involved in healthcare and it became an "industry." I grieve for those who will lose their jobs, one of whom may be me, but I also grieve for this hospital which I have served for over 20 years. May God give us and it the grace to withstand the future of healthcare.

  2. Why do people constantly harp on this issue and act ignorant about what a city population measures? A city's population is the city's population. There is no argument or debate about it. If you want to measure the density of a city--measure it. If you want to measure the size of a metropolitan area, then measure the metropolitan population. City boundaries cover different sized areas--and they always have (though the disparity has probably increased since about 1900 or so when more cities began annexing their surrounding communities). For example, San Francisco only covers 49 square miles while Houston cover nearly 600 square miles. No one argues about the population rankings of either city even though they clearly cover extremely different sized areas. Indianapolis is the 13 largest city by population in the U.S. That is a fact. While the population of a metropolitan area may give you a better sense of how large a community is, as noted, even metro areas can vary widely in the size of geographic area they cover--so that is not a perfect comparison either.

  3. If Whole Foods went in, I doubt the Nora one would stay open, and with all those customers coming to Broad Ripple traffic would be horrible, and forget about a run to the grocery on weekend nights. I think concern over the number of apartments is misplaced, but the 400 space parking garage has me concerned - someone needs to ask the developer just how much traffic they think this development is going to generate. I am not against more neighborhood residents, but heavy commercial traffic going in and out at that location sounds like a mess.

  4. I thought everyone was innocent until guilt was proven. Seems people have already convicted Reggie in the press. My nephew was a good kid and is a good man, more to this story im sure

  5. Going by the Marion County population only is of little use. 13th largest? No Way! To judge the real size of a metro area, the easy way is to look at the Arbitron rating list. Indianapolis hovers around 40th largest in the nation--sometimes more, sometimes less. Advertisers want to know exactly how large the population is before they buy radio advertising. Arbitron figured it out long ago. Indianapolis is estimated at 1,427,500. The real #13 is Seattle-Tacoma with a metro population of 3,470,400. So, the population of just Marion County is completely irrelevant to anything useful as far as metro area planning.

ADVERTISEMENT