Honda's July sales tally was a whopping 31.8% gain versus last July. Clearing out leftovers to make room for the sixth edition of its popular Accord, Honda management wondered if they should have produced a few thousand more of the still-popular old model. Four years ago, in this column, I questioned whether the previous brand-new Accord had what it took. Obviously, it did.
As you'll read in this issue's cover story, the latest (and best) Accord is a "one class above" mid-sizer with many inclusions. but at more or less current pricing. Honda proudly says it designed-in the new model's better value, rather than achieving it by decontenting.
Barring a fiscal calamity, I'm not pondering whether Accord bI will be a hit-it - it wll. Honda has millions of loyal owners of Civics and current Accords who can't wait to trade up. This bigger, American-styled car will appeal to Taurus and Camry intenders. too. Re-lease and conquest programs are just waiting for the signal. Aside from a possible price advantage, Nissan's new Altima and Mazda's new 626 are good efforts, but they were development budget-limited - and neither car is really in the high-volume hunt. Honda plans to build and sell 321.000 Accord sedans in its ramp-up '98 model year more in 1999.
Is that enough to regain the top-selling sedan crown from Ford's Taurus? Honda executive vice-president Tom Elliott doesn't worry about it. The Accord represents a big share of Honda's U.S. volume. Elliott simply wants to sell his planned number of units, 360,000 to 400,000 Accord sedans and 50,000 coupes in a full year. If that makes Accord number one, it's fine with him. But the sales crown's not his primary goal.
Elliott sees shrinkage in the fullsized car classes and among smaller cars. below the Civic. Although the Accord's class is hotly-contested, he thinks it's also likely to remain the most popular for family sedans. Is Elliott optimistic? "We've always had a (replacement) Accord that's better than its predecessor," he says, s; "hut this car is just so much better. I don't see how it can fail."
Looking ahead, Elliott wants to sell a million Honda units in the U.S. by the year 2000. Honda expects to produce 910,000 of those cars locally, including two new engines, and also expects to export more of its U.S.built cars in the future.
For a company that doesn't (yet?) build pickup trucks, Honda's progress and market prowess are remarkable. But there are challenges, including as many as 80 potentially embarrassing lawsuits pending from American Honda-, 1994-95 sales management kick-back scandal. Some dealers are also fuming about what they call the "McDonaldization" of Honda. One dealer who preferred anonymity told me, "... this latest J.D. Power-driven foolishness is forcing us into new buildings that look like used White Castles."
Dealer gripes aside for a moment, the upgrade rationale is fundamental and probably necessary. As competitors improve, the principal difference among carmakers becomes brand image. Standardizing salesrooms is nothing new; it worked in the early '60s for Volkswagen, and it could have a positive effect for Honda. but it s a BandAid measure. Honda would be better served refining its dealer body to be as user-friendly as its cars.
With so much great new product coming I look for retailing to be the principal new car battle ground. I also think Tom Elliott's right: The latest Accord represents very, very tough competition.
[Author Affiliation]
Ken Gross, an automotive writer, is director of the Petersen Automotive Museum in Los Angeles.
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