kirbyflorida

Thanks for the info, I am really surprised at the M numbers, I never see them on the street, and we have everything down here in Sarasota, or at least they blend in.

I still am glad the Rl is rare and I find it the best drivers car with super reliability and the best ergonomics, I could have bought any of them.

kenny5

Based on Bob's data, Infiniti has done right for its M seris, which has been selling well without big discounts. OTOH, the RL has been lackluster, particularly in 2006, despite hefty discounts. While the M series consists of several models, and even though I don't have the breakdown between M35 v M45 figures, my gut feeling tells me that the M35 (alone) sells better than the RL.

Acura, the first luxury nameplate from Japan back in the mid to late 80s, needs to see what its Japanese competitors are doing. The Acura dealerships cannot (and should not) solely blame Acura, because their less than stellar customer service most likely contributed to the poor sales performance.

kenny5

Being rare is not such a good thing sometimes. Witness the demise of Infiniti's Q45, which went from rarity to extinction.

neuronbob

For jhr:

Acura RL series:

November numbers:
2006 731
2005 1298, year over year decrease 43.7%
2004 1941

2003 441 1G RL
2002 595
2001 1070
2000 1298
1999 1010

YTD November
2006 10,799
2005 16,294, decrease 33.7%
2004 6786 (includes the worse-selling 2004 1G RL)

2003 6415 1G RL
2002 8857
2001 9790
2000 13,342
1999 12,192

That's as far back as I can get in the Acura News archives.

In any case, this proves jhr's point, that the current RL is outselling the previous model, specifically in the last model's last three model years. Before that, the 1G RL was selling better as it was at the middle of its model cycle.

In any case, I still think the model is salvageable with some of the suggestions above. Mostly, Acura has to get the RL out to the public somehow.

phile

They can start with the next car show. Put an RL with a wood shifter and wood steering wheel on the floor.

jhr3uva90

Also, the RL is salvageable because basically the same car is sold on different continents. The Acura TL is sold only in North America, so it MUST do well here. The RL is sold in North America, Europe, Australia, and Japan. As long as cumulative sales are okay, the RL will probably survive.

CL6

Honda finally stopped putting 'Honda' on the windows. Now it says Acura. I think that was last year. Honda also has a problem using its name in association with Acura. And car mags always use Honda and Acura in the same breath.

At one autoshow I was working there was Acura on one side, Honda on the other, and Honda lawn mowers and generators in the middle! What idiots.

neuronbob

We knew the TL was going to be sold in China--that's old news. This press release, however, indicates the RL will also be sold in China. Hopefully it will do well there.

(found it looking for Legend sales numbers in Japan--just curious about that)

Edit: This press release indicates that Honda is hoping to sell 500 Legends a month in Japan. It also indicates that Japanese Legend owners will be able to operate the paddle shifters in D. Hmmmmm......interesting.....I still want those front cameras, though. It costs ¥5,250,000 including tax ($44,415).

CL6

Great find thank you so much!

jhr3uva90

I did a ratio and proportions calculation based on Japan's population and the US population. Selling 500 units a month in Japan is proportional to about 713.55 units in the US, which is about how many are selling.

I still believe the RL/Legend was designed and engineered with the Japanese market in mind more than the US market, even though the US sells more units, which makes sense because we have more people.

Yes, the TL will be sold in China, but right now they are heavily dependent on the US. China sales will probably be miniscule, not because there's anything wrong with the TL, but because of the car market in China. Selling Acuras in China is almost like a demonstration project.

wstr75

Jhr3uva90, check the ratio and proportions numbers again. According to this site:

http://www.infoplease.com/ipa/A0004391.html

USA = 298 million, Japan = 127 million which is 2.34X.

2.34 * 500 = 1170 cars per month

Is the uva90 = University of Virginia 1990?

jhr3uva90

Actually, you're right. I re-calculated and got 1161.42, so approximately 1161 RLs should be sold in the US to keep it proportional with Japan's sales goals. This brings me to another question: why did Acura predict they would sell 20,000 2005 Acura RL's? 14,000 seemed more realistic. Maybe Acura should keep their sales goals to themselves.

And yes uva90 is University of Virginia 1990. B.A. in English, which is why I can't do math.

neuronbob

I just looked at the price of the RL in yuan. 680,000=$86k. The TL costs the equivalent of $55k.

Is the cost of living that high in China?

AsianTL

I think import tax is high in China. (86K = more than 70% tax)
Average worker earns less than $3.00 U.S. dollar a day in China.
In Vietnam, average worker earns less than $1.50 U.S. dollar a day and the Toyota camry costs close to $40,000.00 U.S. dollar

iforyou

iTrader: (1)

I am not sure about China, but in Hong Kong, cars are not cheap too. I have the CarPlus magazine from Hong Kong and it has a test between the RL and the Passat. The RL is HKD$586k, which is USD$75341.59. Last time I checked, the Top of the line RL in the States is USD$53-54k. For comparison, the Passat 3.2V6 in that test is HKD$438k, which is USD$56313.34.

Countries/Cities like China and Hong Kong, the cost of living generally isn't that high. Things like foods, and other necessities are actually a whole lot cheaper than North America (especially after the depression). For instance, in HK, afternoon tea meals are about HKD$15, or less than USD$2. I'm not sure about the States, but here in Canada, an afternoon tea meal costs around CAD$5. In China, foods and other necessities are even cheaper. That's why many people in HK like to shop in China. Cars are considered luxurious items and they are not necessary at all in HK. The public transportation network is very well developed and there is no need to drive. The time it takes to find a parking spot in HK is usually long and there is rarely free parking.

iforyou

iTrader: (1)

In other words, cars in China are for the upper class while cars in HK are for the middle and upper class.

Andy74

I'm on my first Acura (TL) - converted from BMW 330 (I couldn't stand heir quality problems). I think people here assume that BMW dealerships are perfect - yes the service advisors are sweet most of the time, but BMWNA is an evil organization and simply refuses to fix certain things under warranty. I had 3 3 series cars - each time something went wrong, it was an uphill battle with BMW to get things fixed under warranty.

I was hoping to get into RL someday, but this conversation has me worried. I did not know RL was doing so bad. I think it's a lot better value than a BMW 5 series (can't compare to Infinity/Lexus, since I know little about these cars).

iforyou

iTrader: (1)

That's what I've heard from my friends (they are twins) who drive BMW's too. They have a 5 series and I think there was a tranny problem which should be fixed by BMW free of charge, but yet, my friends had to pay for it.

Anyways, in Japan in 2004, when the new Legend came out, they sold 2912 of them. In 2003, they only sold 656 of the old Legend. --> http://hondanews.com/CatID1011?mid=2...45717&mime=asc

"Honda Legend Wins Japan Car of the Year Award 2004-2005 and Most Advanced Technology Award"
--> http://world.honda.com/news/2004/c041111.html

I saw this in the article:

"In the roughly one month period since it went on sale in Japan on October 7th, over 2,200 customer orders have been received for the new Legend."

It seems like it's a success over there in Japan when the car first launched, I wonder how it's doing right now, but so far I could not find any info.

iforyou

iTrader: (1)

"Honda Plans to Sell at Least 26,000 Legends Annually"
http://quote.bloomberg.com/apps/news...q0&refer=japan

Some quotes from the article:

"The company aims to sell 20,000 units a year in North America and 6,000 units domestically..."
The 20,000 units goal was a bit too high as we can see now.

"The company aims to sell 2,500 models domestically in the next three months."
I think they reached this goal. They sold more than 2200 in the first month of introduction.

gdevine

I don't watch much TV, but I don't recall viewing and advertisement solely for the RL. I certainly have for the specific Lexus and Infiniti models. How can they expect to sell cars if they don't focus on a specific model. The only reason I became interested in the RL was from an article I read in Car and Driver a year ago. I was not even aware of the RL until that article.

Chas2

There has been at least one TV ad for the RL, if memory serves correctly.

It was trying to showcase the SH-AWD, showing the car ripping through twisties and flinging the yellow centerline stripes off the road like pieces of ribbon. I think if I were not interested in the 2G RL, I would not have really understood what was so special about the car. They may have even shown the torque being shifted to the outside rear wheel, but my recollection was it was not a long ad, 30 seconds at most. There was the long version and the 10 second spot version. Have not seen it in over a year.

dwboston

There have been other TV spots solely for the RL as well. One showcasing the Real-Time Traffic feature of the Nav system with a guy driving to work on a mountain road parallel to the crowded freeway (though the ad implied the system could automatically reroute around traffic). The other one I remember was for the CMBS with the car driving in heavy fog and the driver being alerted to a car in front that wasn't visible. All of the RL ads I have seen focus on a specific technology in the car.

jhr3uva90

Actually, I think they did manage to sell 20,000 RLs in NORTH AMERICA the first year, when you combine USA and Canada sales. It's been downhill ever since, though.

GoHawks

Same here in the Chicago area. I don't know of one Acura dealership near a Honda one.

jhr3uva90

I don't think that's the case in Northern VA, either. However, in Colma, the Acura dealership is next door to the Honda dealership, but the Lexus dealership is not near the Toyota dealership.

GoHawks

Just got done reading the whole thread. Not too much more to add, but I'll add my thoughts.

Customer preception - As been stated, customers don't view Acura and Lexus in the same class. Dealer experience is a start (I think this has hurt Acura the most). When I cross shopped the the Lexus GS, the Lexus salespeople just seemed more mature and professional. That's not the case with Acura. I feel that my dealership (Acura of Libertyville) probably is the closest in differentiating themselves, but sometimes when I'm in for service and I'm browsing the showroom floor I feel I have to quickly say "I'm just browsing!", before I jumped on by a couple sales people. I don't know how to explain it, but it doesn't always feel upscale. My salesguy was great, but quite honestly he really didn't have to sell me on the car. I had already done my research and cross-shopped other cars and reached my descision. While Toyota seems to go at length to seperate the identities of Toyo/Lexus, Honda almost seems to intentionally point out that they're the parent company of Acura.

Marketing - The techy geek in me wants to agree that Acura should be touting their technology in their ads, but I wonder is that really the solution? Lexus does their "December to remember" ads and all you see is a car with a bow on top. Nothing about the car, just about the joy of "owning a Lexus". Maybe you have to crawl before you walk before you run.

I am convinced that the RL is as good as the competition (proven in many comparison tests), Acura just needs to figure out how to carve out their niche and create an effective marketing plan, which many of you have pointed out accurately already.

As for CL6, No offense intended (I really mean that), but you don't come across as someone who believes in the products he's selling, and I gotta believe that shows unless you get someone like me who is walking in with his mind already made up and is now looking for the best price.

jhr3uva90

GoHawks, I really agree with your techie geek comment. The RL is the ulitmate techie geek car. The problem is that there aren't many of us tech geeks to begin with and even fewer who can afford an RL, and even fewer still who would spend that kind of money on what is essentially a geeky midsize family sedan. It will be interesting to see what Honda/Acura does with the NSX replacement.

Granted, I really love my RL. However, I've been thinking about the CEO interview which is the basis of this thread. I read the entire interview, plus other Honda press releases. Based on that, I don't think that Honda is all that committed to the luxury car market. Yes, they have the Acura brand and they want Acura to succeed. But I don't think Honda Japan defines "success" for Acura as being the #1 luxury car brand in America like Lexus is. I think that Honda's CEO and other Japanese Honda executives are looking at the long term. The luxury car market does seem to have much long term growth. Among the current luxury car drivers, there is much brand loyalty. BMW drivers do not drive Mercedes, and vice versa. Meanwhile, in the long term, there will be increasing demand for alternative fuel vehicles as the price of gasoline increases around the world. Honda is trying to be at the forefront of that alternative fuel vehicle market. I think Honda sees the hybrid as a stop-gap or transitional technology, and they are pushing ahead to more long term solutions. Their push for diesel engines will open the door to bio-diesel and other flex-fuel cars. They are also pushing toward hydrogen-powered fuel-cell vehicles.

Does that mean Honda should get out of the luxury car business? Well, some would argue that they aren't really in the luxury car business. In my opinion, they've only got one luxury sedan: the Honda Legend/Acura RL. Everything else is a FWD cousin of the Accord (actually, the TSX "is" the Accord). But regardless, I think there are some improvements that can enhance the Acura brand. I just don't see the people at the top, especially Honda's CEO, putting that much emphasis on it.

neuronbob

And don't forget that not only was the RL/Legend the Japan COTY in 2005, it was also a 2005 Car and Driver 10 Best. While AZ was where I found out about the RL, C&D's ranking and subsequent comparo got me really interested and appreciative from afar.

Rob144

I just got back from the San Diego Auto Show with a friend, and here are some thoughts along the lines of this already thoughtful discussion.

The Acura stand was a mixed bag. They had lots of room and not so many cars in their space. They had a pearl white Tech RL under some spot lights in front of a temporary wall, and it looked really good. Too bad is was way in the back of the display area. The other RLs were the new silver (base model, with the shark fin), and a metallic gray Tech package.

There were a few RDXs, which looked pretty bland in their grey colors (and did not come across as worth the $$). And some MDXs, which got most of the traffic.

I would rate the Acura display a C+. At least they had power to the RL so you could play with the NAV system and hear the radio (which Lexus always does). They should have had a different color palette for the cars on display, and at least one tricked out RL on a turntable. Even the TL was not very prominent in the display. All in all, it was pretty bland.

My friend who is not a "car guy" in the sense that he knows the ins and outs of a given manufacturers model structure, kept asking the difference between the TL and the RL. It was not easy distinguish between them in a few words. They are about the same size, with some similar styling, and their interiors are somewhat similar (perforated leather, three-guage cluster, etc).

It was actually easier to show him why the RL was my preference over the Lexus GS300 than it was to talk about the differences between the RL and TL. (In fact, I wonder if they tried to keep the TL away from the RL.) I tried the following RL vs TL talking points to little avail:

- made in Japan instead of US
- SH-AWD
- more luxurious
- real wood in my '06
- a little bigger
- more horsepower (but not really faster)
- more a 5-series competitor vs. the TL's 3-series

I'm sure there's something else that must capture it, but it would take more of a "car guy" to understand. And you former 3G TL folks could probably more easily compare the two from experience, but it would be hard to convince a TL looky-lou to try an RL. Acura never should have dumped the Legend name - it captured the essence of their top-of-line car in a single word. In fact, I sometimes say that the RL is the Legend in the rest of the world, which gets usually an understanding nod. You can kind of see how the RL ends up being the odd-man out between the popular TL and MDX of people don't know what it is.

Amongst all the rest of the cars I saw, the RLs had what appeared to be best factory paint job of any car in the show. And the interior was as nice as cars costing way more.

After the show, I concluded that you'd have to spend significantly more than the RL's MSRP to get a significant step up in overall automotive goodness. But that fact will remain a secret.

Rob144

jhr3uva90

Speaking of the size issue, isn't it amazing how Lexus can come up with two cars that are roughly the same size (GS and ES) and have no problems differentiating the two, but Acura can't seem to differentiate the RL and TL? Amazing!

Contrary to what Acura may have said the TL is not a competitor to the BMW 5 Series or the 3 Series. It is basically a sportier, less luxurious competitor to the Lexus ES. I think Acura should really focus on Lexus as the competition.

jhr3uva90

Oh, and one more thing: an easy way to convince a non-car guy about the difference between RL and TL, just say that the RL is built in Japan, where people are perfectionists, while the TL is really well built for an American car.

123456SPEED

Enjoying the thread.
On pricing, the (great) 1995 Legend Coupe LS was stickered at $43,690 on one review I saw. When you look at the technology the 2G RL offers over that coupe a decade later, it's amazing the RL can be priced where it is. I know the yen conversion in 95 effected prices too.

I had a 95 L Coupe, an 88 LS Coupe, and 2 03 CLS coupes, and a (Prelude). I love my coupes but since Acura doesn't love coupe drivers anymore I'm looking at the RL. I love the tech and lux of it but am disappointed with the frumpy styling. Those big-axx taillights and tall and rounded look is unappealing to me. But, hey, what do I know, I admit I am not a sedan lover.
I do think it looks best in darker colors.

neuronbob

While the assembly location is true, a better way to differentiate is that the RL is a true luxury car and the TL is a more sporty entry luxury car along the same lines as the BMW 3 series. Despite all our discussion, the RL IS a luxury car.

Just a few other comments about RL sales....

As far as the 3G TL: when it was released Acura indicated that the 3 series was the target, and I think they succeeded in making the TL a front-wheel drive alternative of the 3 series. It's sales are slowing, sure, but Acura is still selling somewhere north or 5k copies a month when for almost three years it was 7k copies a month. I would say this is normal for a model in the middle of its design life. BTW, there has been no advertisement at all for the new TL-S. None. Big mistake on Acura's part.

The RL's situation is totally different. The first year and a half after the RL's release, it was a strong seller, then sales took a nosedive a bit over six months ago. My guess is that what happened is the same thing that happened when Apple released the new Intel Macs--current RL owners traded on the new model, and some new people who heard about it in C&D bought. Acura sat on its laurels and didn't bother to market the RL. Sales dropped because people didn't think of the RL. While the RL's features may be an issue (e.g. V8 power), it's actually pretty competitive for the market. I still think the primary issue is that we simply don't see any mention of the RL ANYWHERE in the automotive press anymore, there are no ads, there is no attempt to keep the RL in the public eye. Further, the luxury car market has become increasingly crowded over the last few years and people have the mentality of searching out the newest car. During the RL's brief lifespan, the Infiniti G and new Lexus GS (which, despite selling more copies than the RL recently, has also been tanking) were released.

Anyway...sorry to be so longwinded .

jhr3uva90

Great post from neuronbob! Happy New Year!

neuronbob

OK, Acura is doing something right. I finally opened my February 2007 Car and Driver. Acura paid for an a two-page spread on pages 6-7 (you have to pass the ad to get to page 2 of the table of contents). It's their "Chief Technology Officer" ad if you've seen it before. Good ad, only problem is that it's in C & D and they don't mention that it won 10 Best in C & D in 2005.

I wish I had time to scan the ad.

dalieu

i also went to the sd auto show, though my goal was to see acura's ugly advanced sedan concept. i have a pic of the display rob is talking about here: http://aboutacura.blogspot.com/2006/...onal-auto.html
(not the best quality pic, but you get the idea) it wasn't the best display, nor was it the worst one there.

i also wanted to add that it seemed like the TL was the main attraction because it was on the rotating display near the center of acura's section.

ps. i was disappointed that i was unable to find acura's ASC anywhere, actually i couldn't find any concepts at the sd auto show. =/

CL6

None taken. I honestly do believe in the products I sell (as well as the one I write my bank a check every month) but you do not get product buyers on the RL level as much as payment buyers. By that I mean lease payment and by that I mean 5-series BMW. When that discussion comes out BMW always wins.

And how does someone who 'believes' in the product counter when an RL customer offers $5,000 below invoice (and then it's clear they don't believe in the product) and it's still a tough sell?

I enjoy the conversations but there is a saying that the rock gets worn down by drops of water rather than a rain storm.

Mike_TX

As is often the case, CL6, I don't quite get your point here. "Payment buyers"? "By that I mean lease payment and 5-series BMW"? "When that discussion comes out BMW always wins."?

If you're suggesting there is a level at which buyers don't give a hoot about the payment amount, I'll agree, but I'd have to say it's 'way beyond Acura ... AND BMW. And I say that as a 4-time BMW lesee (one 740i and 3 540i's). Even when I leased the 740 I was keenly aware of the lease payment, since I consider myself a "smart" buyer.

Now, when people fork over $130,000 for a Mercedes SL or $300,000 for a Bugatti or even $185,000 for an Aston, they're usually at the level where price isn't that big a consideration. And maybe that's true at the BMW 750 level, too, but not much below that.

The reason someone who believes in the product offers lowball prices for an RL is because Honda/Acura has dropped the ball on this car and is making up for it by slashing the price. No informed buyer is going to pay anywhere near list for an RL.

As far as BMW "always winning" in the lease payment discussion, I'll have to say they didn't win with me. Not that I don't believe in the BMW product - I just don't think their technology is as good as that in the RL and their pricing has gotten more unrealistic than Acura's!

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dwboston

I think he's referring to people shopping cars in the same class using the lease payment terms as the decision point. I think he's right here - BMW had better lease terms on the 5-series than Acura did on the RL. It's why you see so many 5-series on the road.

That said I still don't get CL6's antipathy towards customers who want the car for the lowest price possible. Why should the customer pay you more? The "market" sets the price for an item, any item. The MSRP is meaningless - especially if few are willing to pay it for an item the manufacturer needs to sell in volume to be successful. When customers complain about hot/new models selling above MSRP the response from the dealers is always "the market sets the price." You just don't like it when the customer has all of the leverage. When the manufacturer starts discounting and offering "marketing incentives" to move the car then all bets are off. Should the customer pay more or not demand the $4000 off to prove something to you? Acura hasn't yet successfully positioned the brand on par with BMW and Lexus so the brand doesn't command the same premium valuation. Even though the cars may not be as good as the RL, people are willing to pay up for the BMW and Lexus name/cachet and not for Acuras except for hot/niche products - that's the reality of the current situation.

Mike_TX

Whatever. But this gives me a chance to rip the car biz.

A car is one of the only consumer items we have to haggle for like tourists in a Mexican marketplace. We don't buy food that way, or sofas or refrigerators, but the car business has really hung onto this arcane method of sale. The reason most people assume they have is so they can screw them out of money. That sounds a little harsh, but if I pay $30k for something and you pay $32k for the exact same thing, you've basically been screwed for $2k. It all comes down to how informed you make yourself and how good your negotiating skills are. But who REALLY wants to play this game?

The dealers like this way of doing business because they can screw enough people out of extra money to make a good profit. I had hopes the system was falling apart a year ago when the U.S. carmakers went to "Employee Pricing". Sales picked up because people didn't feel screwed, the dealers still had profits built in, and everyone was happy. But greed won the day, and we're back to the bad old days.

I sold new cars many years ago for awhile (until I just couldn't stand it anymore), and one of my good friends is a former BMW - and current Mercedes - sales consultant. All car salespeople know the game is to sell the car for as much as possible, and I'm sure that's one reason CL6 isn't fond of people looking for the bottom dollar. To be a car salesman, you have to suspend your belief in the wisdom of paying as little as possible for anything one buys. I'm sure CL6 doesn't look for the priciest place in town to buy his shirts and shoes and suits, or his food or his furniture or appliances. But he expects you not to quibble when he shows you the window sticker on his new car.

The car business has done this to itself, by way of incentives, rebates, "red tag sales", etc., and the well-known fact that almost no one pays window sticker for a car. Trouble is, buyers are becoming more knowledgeable, thanks to the internet and other consumer-oriented sources of information, and they're driving harder bargains.

I still think it's time to start selling cars at a set price. Build in enough profit so the dealer and salespeople come out fine, but get rid of the stupid marked-up MSRP that everyone knows is a joke. Cars would plunge 2 to 5 thousand dollars overnight. Then, dealers would have to be "special" in some way to generate extra sales and profits ... like, maybe, uh, be efficient, and treat customers like 1st class citizens, and offer good service, and so on. What a concept. But I believe the customers would buy more freely, since most people would rather have a limb amputated than go through the torture of haggling for a car.

Only thing is, salesmen would be unnecessary, since dealers would just need a few people to take orders and help customers with delivery, etc. Hmmm ... sounds like more profit for the dealer.

This isn't off-topic, is it?
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