Acura Tries to Shed Its Also-Ran Position

When Honda Motor Co. Ltd. created its Acura brand for the U.S. in 1986, the auto maker did not intend for it to compete directly with established luxury players. Instead, Acura would serve as an intercept brand for Honda customers looking for a near-luxury experience, says John Mendel, American Honda Motor Co. Inc. executive vice president. Before Acura, those customers would have been considering

When Honda Motor Co. Ltd. created its Acura brand for the U.S. in 1986, the auto maker did not intend for it to compete directly with established luxury players.

Instead, Acura would serve as an “intercept brand” for Honda customers looking for a “near-luxury experience,” says John Mendel, American Honda Motor Co. Inc. executive vice president. Before Acura, those customers would have been considering more expensive European luxury brands such as Volvo, BMW or Mercedes-Benz.

That strategy soon will end as Acura attempts to compete more directly in the luxury sector, Mendel says, with the first attempts coming after the debut of the next-generation NXS supercar in 2010.

“For the first time, we're now ready to take Acura to Tier 1,” he says. “This involves the retail network, the product and, frankly, our mindset as an organization.”

Acura lags in the luxury field, particularly behind Japanese rival Lexus, a division of Toyota Motor Corp.

Last year, Acura sold 180,104 vehicles, down more than 10% from 2006, according to Ward's data.

Meanwhile, BMW sold 335,840 vehicles (up 7%); Lexus, 329,178 (up 2%); Mercedes, 253,218 (up 2%); and Cadillac, 214,727 (down 5%).

Even Buick, whose 2007 sales fell 23% from prior-year, delivered more vehicles than Acura (185,791).

Mendel says the plan to revitalize the brand has been in the works the past few years.

In April, Acura management will lay out more of the strategy in a meeting with its 253 U.S. dealers, but the tactic will not hinge on a particular new model in the future, Mendel says.

“It won't be any one big bang,” Mendel says of the plan. “You can't build a brand on one product, although our success or failure rides on the products.”

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