With the ILX, brand aims to boost '12 U.S. sales 46%
Acura will return to the entry-luxury segment when the ILX small sedan reaches showrooms in May.
by Mark Rechtin
In addition to the new ILX small sedan and redesigned RDX compact crossover coming in spring, a tease of the redesigned RL flagship due this fall will be shown at the New York auto show in April.
Then, the volume leading TL sedan and MDX mid-sized crossover are slated for 2013 redesigns. The much-hyped NSX supercar should arrive by the end of 2014.
Six years ago, Honda Motor Co. executives decided to move Acura upscale and shelve the brand's entry-level luxury offer -- the compact RSX hatchback, which was the successor to the Integra. The timing couldn't have been worse.
In less than three years, many of Acura's competitors announced plans to offer products that fit the RSX and Integra's niches. Then the global economy collapsed and many luxury-vehicle buyers pared back their purchases.
In May, Acura will return to the entry-luxury segment with the ILX. The sedan won't remind anyone of the sportiness of the RSX or Integra, but Acura hopes it will appeal to sensible Gen Y customers.
The collapse of Lehman Brothers "changed the philosophy for luxury purchases. People are making more rational purchase decisions, taking pride in the deal they strike," said Jeff Conrad, Acura Division general manager. "Generation Y aspires to luxury, but they need a little help getting there."
The new lineup will feature four sedans, the TSX, TL, RL and ILX. There is some overlap, but Conrad said Acura has no plans to eliminate any of the four.
"We're remaking the entire lineup over the next few years," Conrad said. "Nothing goes away, and we're sticking with that. We've had a pretty strong reliance on sport-utilities and we want to bolster our sedans."
With 40,000 units of additional volume from the estimated $27,000 ILX, Acura expects its overall U.S. sales to jump 46 percent to 180,000 units this year -- up from 123,299 in 2011. If not for the Japanese earthquake and Thai flooding last year, Acura estimates its 2011 U.S. sales would have been about 150,000. So the volume jump is not as large as it would seem, Conrad said.
In the longer term, it's unclear whether Acura aims to fight head-to-head against Lexus, BMW and Mercedes-Benz.
"We want to take one year at a time," Conrad said. "We're not going to go set volume targets for future years. Everyone wants to continue to grow, but for the foreseeable future this is a pretty good level to be at."
Acura doesn't want to increase its dealer count, Conrad said. But the brand needs to improve owner loyalty.
At 45 percent, Acura customer loyalty is slightly below the industry average of 49 percent, according to the J.D. Power and Associates 2012 Customer Retention Study.
According to the study, Acura doesn't really compete in the luxury segment. It mainly attracts customers from -- and loses them to -- Honda and Toyota.
"I know we're not satisfied with our loyalty numbers," Conrad said. He said retention efforts will include data mining to better understand when and how to contact existing customers.
Acura also will be more aggressive with presale marketing before redesigned products reach market. Already, 3,500 potential 2013 RDX buyers are in Acura's dealer system, waiting for the on-sale date to arrive.
On the plus side, Conrad said Acura's average customer age is two to four years younger than those of other premium brands.
Although Acura's core customers continue to be baby boomers, the brand is seeking to connect with younger buyers. In researching Gen Y -- consumers aged 19 to 31 -- Acura has discovered that "value for money" is the primary concern, replacing the baby boomers' focus on quality, reliability and fun-to-drive vehicles.
So what do the Gen Y customers covet? Connected cars, with features such as Bluetooth, Pandora and SMS text messaging. Cool engineering solutions for better performance aren't nearly so high on the wish list.
"The real key is not that we offer it, but that we offer it and put it on a vehicle and make it intuitive to use," Conrad said.
Acura will continue its appeal to Gen Y through its product placement arrangement with comic-book-movie franchise Marvel Enterprises. Already seen in Thor, Acura products will be highlighted in this summer's mutant-superhero flick The Avengers.
That should play into the cool factor that appeals to young buyers. When asked what makes a vehicle cool, Gen Y respondents said exterior styling, affordability and environmental consciousness.
"It's no secret the last few years have been pretty tough on Acura," Conrad said. "'Smart luxury' has become our internal mantra."
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