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Honda’s 2013 Accord. (HONDA CANADA INC.)
Honda’s 2013 Accord. (HONDA CANADA INC.)

Honda needs new Accord to drive higher U.S. sales Add to ...

Honda Motor Co. needs the next generation of its bread-and-butter mid-sized car, the Accord, to be a hit in the United States.

The Japanese auto maker is counting on the 2013 Accord, being launched this month, to recapture share in the U.S. market’s largest and most competitive segment. Rivals are not standing still, with Toyota Motor Corp., Nissan Motor Co., General Motors Co. and Ford Motor Co. rolling out redesigned models of their own.

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“There’s no question that Accord is the single most important model in our lineup,” Honda vice-president Mike Accavitti said at an event outside Detroit to introduce the car.

Analysts have said the new Accord needs to be a home run for Honda, whose 2012 Civic small car was criticized by some reviewers for uninspired design and bumpy ride. The success of the new Accord, which includes a new generation of engines and transmissions to boost fuel efficiency, is also crucial for Honda’s global sales ambitions.

Honda has set a global sales target of 4.3 million vehicles in the financial year to March 2013, up 38 per cent from the previous year, with North America to account for about 40 per cent of the total. Honda expects to sell almost 1.3 million vehicles in the United States this year.

With an annual sales target in the U.S. market of 350,000 cars for the ninth-generation Accord, Honda has a big challenge as it has seen the car’s market share in its segment shrink from 15.7 per cent in 2009 to 12.2 per cent so far this year, according to TrueCar.com.

“Honda’s going to have a tough time recapturing share,” said Bob Martin, a senior consultant at product development firm The CARLAB. “Despite their claims that it’s a revolutionary new design, I just don’t think it’s a big enough change to beat back Hyundai, Kia, (Volkswagen AG’s) Passat and of course the Ford Fusion.

“Honda and Toyota’s biggest problem is that there’s no one selling crappy cars here any more,” he added. “With U.S. auto makers making the improvements they’ve made, they’re not so far behind that you’d have to be a fool to buy a Chevy.”

Mr. Martin questioned whether Honda can get back to 300,000 annual Accord sales. It has sold almost 220,000 through August, up 35 per cent from last year but far off the pace of 1998 through 2001 when Accord’s U.S. sales annually topped 400,000.

The Accord sedan will go on sale Sept. 19, followed by the coupe version in October and a plug-in hybrid version early next year. A conventional hybrid model will go on sale in the summer of 2013.

Honda has not disclosed the pricing for the 2013 Accord, but it is expected to be similar to the current model, which starts at $22,280 (U.S.). In a still-recovering market where auto makers battle for every sale, that could be key as consumers focus on price and value, analysts said.

“There’s not a lot of dogs out there now,” said Edmunds.com analyst Bill Visnic. “It’s going to get to a point where $500 or $1,000 price difference once again becomes a big deal to somebody shopping in this segment.”

Mr. Visnic added he would not be surprised if Honda were forced to quickly ramp up incentives on the new Accord just as it did with the Civic. “Even on an all-new vehicle, we’ve seen a lot of auto makers breaking the ice with the incentives pretty quickly,” he said.

The Accord, launched in 1976, is Honda’s best-selling vehicle. Previous generations of the Accord helped solidify the Japanese automaker’s reputation for easy-to-drive, smartly engineered cars with good fuel mileage.

Honda, which has acknowledged that it lost its way on design across the company, revamped its development process to avoid more cars like the 2012 Civic, which Consumer Reports savaged last summer for its low-quality interior and choppy ride, dropping it from the magazine’s recommended list for the first time ever and ranking it near the bottom among small cars.

In fact, the Accord design already has been tweaked as Honda managers in a design review last year criticized what they saw as bland, according to an executive who attended the event who asked not to be identified discussing internal strategy. As a result, the initial design was scrapped.

Honda hopes the new Accord, including a bigger interior and shorter exterior, will help it keep pace with or outsell the likes of the Toyota Camry, Nissan Altima, Fusion, Chevrolet Malibu and Hyundai Sonata.

Asked about the new versions of the Altima and Fusion, John Mendel, vice-president of sales at American Honda Motor, said he was not worried.

“Neither of those cars is a threat to our retail sales position in America,” he said in an e-mail. “We welcome the competition.”

 
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