Acura Posts Sales Increase in 2004
05-12-2004, 07:39 AM
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Acura Posts Sales Increase in 2004
http://www.forbes.com/columnists/200...0420flint.html
After many years of disappointing performance, Acura, Honda's luxury division, has posted a 29% sales increase in the first three months of 2004. What's more, a new top-of-the-line luxury model, a redesigned RL (shown above), is coming this fall to challenge the perennial leaders--the Mercedes E-Class and BMW 5 Series.
Is Acura really on the winning track, or is this just a hot streak that will fade in a year? It's hard to tell. The current gains come from two new models: the TL, a $35,000, fully equipped sports sedan that is the best-selling Acura, and the TSX, a smaller, four-cylinder sports sedan.
More From Jerry Flint
--------------------------------------------------------------------------------
Acura builds really good cars, with terrific reputations for quality and value. What has held Acura back is its insistence on making cars with front-wheel drive in a class where rear-drivers are preferred. Motor Trend magazine, for example, in a test of four sports sedans, rates the Acura TL third behind Nissan's (nasdaq: NSANY - news - people ) Infiniti G35 and General Motors' (nyse: GM - news - people ) Cadillac CTS, and ahead only of the Saab 9-3 Aero.
"A super value, but front drive compromises dynamic performance," says Motor Trend. The TL "will raise no one's blood lust," writes the Los Angeles Times' Dan Neil, who won a Pulitzer Prize for his columns. "The TL is botox for the brain box," notes Neil. I'm not sure what that means, but the botox comment doesn't sound like a compliment.
What has really kept Acura going is one strong model--its wonderful MDX crossover sport utility vehicle. Acura's passenger cars haven't shown much strength over the years and the MDX SUV, which began arriving in 2000, kept the division rolling. The MDX, by the way, is now being produced in North America.
Acura's sales mix appears to be changing: In the first three months of this year, its total sales are up 29% (45,571 units, versus 35,457 a year ago). That's a serious gain. Its TL sedan ran up 19,000 sales, compared with 13,000 for the previous-generation TL in the year-ago quarter. The new TSX did 6,000 sales, and the ever-strong MDX did 14,000. But, for the first time that I can remember, Nissan's Infiniti division crept ahead of Acura in the first quarter. In short, Acura's gains are impressive, but it's running on a very fast track.
The new RL coming this fall represents Acura's strongest attempt to gain market and mind share in the premium sedan segment. The current RL is a dud: It sold only 7,000 units last year and 9,000 the year before.
The old RL had three weaknesses as a luxury car. It was front-wheel drive, it lacked a V-8 and it didn't look luxurious. The upcoming RL tries to remedy these shortcomings. For starters, it comes standard with a sophisticated all-wheel-drive system, which Acura boasts will deliver superior handling. Honda (nyse: HMC - news - people ) still stubbornly refuses to offer a V-8 in any of its sedans, but the V-6 in the new Acura is a powerful 300-horsepower unit. This RL looks like a luxury car, too.
Competition is fierce in the RL's $40,000 to $55,000 price range. Everybody is chasing the prestigious Mercedes E and BMW 5. Acura talks about only 12,000 to 15,000 sales a year for the new RL. They may be playing it safe with the estimates, but even that would be a big improvement over the old model.
The RL isn't the only new challenger in this part of the market. Three other new cars will join the fray over the next 12 months. One contender is the Cadillac STS, a handsome new model, rear-drive (all-wheel-drive is an option), available with either a six- or eight-cylinder engine. Coming in spring 2005 is a new Nissan Infiniti M45, a big redesign of the stodgy existing model. About the same time, Toyota's (nyse: TM - news - people ) Lexus division will launch a new, sleekly styled GS sedan. All these new sedans look good, which means that Acura is not going to get a free ride just because it has an attractive new model.
A strong euro versus the dollar poses another problem for the German rivals. The German sedans in this part of the market are pushing into the $60,000 territory, while the new competitors, hungry for business, may keep their prices lower.
One more car charging into the fight: the Chrysler 300C, which is on sale now. This 300 isn't quite in the German luxury class, but with the wonderful optional Hemi engine and all-wheel drive (available by fall), some buyers are likely to cross-shop this sedan against the best from Europe and Japan. A fully loaded 300C will run just under $40,000. So look out Acura, Infiniti, Cadillac and Lexus. Ready or not, here comes Chrysler.
After many years of disappointing performance, Acura, Honda's luxury division, has posted a 29% sales increase in the first three months of 2004. What's more, a new top-of-the-line luxury model, a redesigned RL (shown above), is coming this fall to challenge the perennial leaders--the Mercedes E-Class and BMW 5 Series.
Is Acura really on the winning track, or is this just a hot streak that will fade in a year? It's hard to tell. The current gains come from two new models: the TL, a $35,000, fully equipped sports sedan that is the best-selling Acura, and the TSX, a smaller, four-cylinder sports sedan.
More From Jerry Flint
--------------------------------------------------------------------------------
Acura builds really good cars, with terrific reputations for quality and value. What has held Acura back is its insistence on making cars with front-wheel drive in a class where rear-drivers are preferred. Motor Trend magazine, for example, in a test of four sports sedans, rates the Acura TL third behind Nissan's (nasdaq: NSANY - news - people ) Infiniti G35 and General Motors' (nyse: GM - news - people ) Cadillac CTS, and ahead only of the Saab 9-3 Aero.
"A super value, but front drive compromises dynamic performance," says Motor Trend. The TL "will raise no one's blood lust," writes the Los Angeles Times' Dan Neil, who won a Pulitzer Prize for his columns. "The TL is botox for the brain box," notes Neil. I'm not sure what that means, but the botox comment doesn't sound like a compliment.
What has really kept Acura going is one strong model--its wonderful MDX crossover sport utility vehicle. Acura's passenger cars haven't shown much strength over the years and the MDX SUV, which began arriving in 2000, kept the division rolling. The MDX, by the way, is now being produced in North America.
Acura's sales mix appears to be changing: In the first three months of this year, its total sales are up 29% (45,571 units, versus 35,457 a year ago). That's a serious gain. Its TL sedan ran up 19,000 sales, compared with 13,000 for the previous-generation TL in the year-ago quarter. The new TSX did 6,000 sales, and the ever-strong MDX did 14,000. But, for the first time that I can remember, Nissan's Infiniti division crept ahead of Acura in the first quarter. In short, Acura's gains are impressive, but it's running on a very fast track.
The new RL coming this fall represents Acura's strongest attempt to gain market and mind share in the premium sedan segment. The current RL is a dud: It sold only 7,000 units last year and 9,000 the year before.
The old RL had three weaknesses as a luxury car. It was front-wheel drive, it lacked a V-8 and it didn't look luxurious. The upcoming RL tries to remedy these shortcomings. For starters, it comes standard with a sophisticated all-wheel-drive system, which Acura boasts will deliver superior handling. Honda (nyse: HMC - news - people ) still stubbornly refuses to offer a V-8 in any of its sedans, but the V-6 in the new Acura is a powerful 300-horsepower unit. This RL looks like a luxury car, too.
Competition is fierce in the RL's $40,000 to $55,000 price range. Everybody is chasing the prestigious Mercedes E and BMW 5. Acura talks about only 12,000 to 15,000 sales a year for the new RL. They may be playing it safe with the estimates, but even that would be a big improvement over the old model.
The RL isn't the only new challenger in this part of the market. Three other new cars will join the fray over the next 12 months. One contender is the Cadillac STS, a handsome new model, rear-drive (all-wheel-drive is an option), available with either a six- or eight-cylinder engine. Coming in spring 2005 is a new Nissan Infiniti M45, a big redesign of the stodgy existing model. About the same time, Toyota's (nyse: TM - news - people ) Lexus division will launch a new, sleekly styled GS sedan. All these new sedans look good, which means that Acura is not going to get a free ride just because it has an attractive new model.
A strong euro versus the dollar poses another problem for the German rivals. The German sedans in this part of the market are pushing into the $60,000 territory, while the new competitors, hungry for business, may keep their prices lower.
One more car charging into the fight: the Chrysler 300C, which is on sale now. This 300 isn't quite in the German luxury class, but with the wonderful optional Hemi engine and all-wheel drive (available by fall), some buyers are likely to cross-shop this sedan against the best from Europe and Japan. A fully loaded 300C will run just under $40,000. So look out Acura, Infiniti, Cadillac and Lexus. Ready or not, here comes Chrysler.
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