Honda to Revamp Accord to Reverse U.S. Car Sales Drop
June 14 (Bloomberg) -- Honda Motor Co., Japan's third- biggest carmaker, said it plans ``substantial'' modifications to its Accord model in an effort to reverse a sales slump that may lead to the company's first U.S. sales decline in 12 years.
``We're planning some fairly major refreshes coming this year,'' John Mendel, Honda's U.S. sales chief, said in an interview today. The changes will address what customers view as the current Accord's shortcomings, including exterior styling and engine power, he said without elaborating. The latest Accord is about halfway through its four- to five-year model life.
In its attempt to boost U.S. demand, Honda is trying to regain share in a market that has accounted for 43 percent of its global sales. Accord sedans and coupes, which made up 25 percent of Tokyo-based Honda's total U.S. sales so far in 2005, fell 9 percent to 143,304 this year through May. Honda's annual U.S. sales haven't fallen since 1993, the longest growth streak in the market.
``Accord is Honda's symbol in this market. They'll do what they have to to protect it,'' said Jim Sanfilippo, executive vice president of Automotive Marketing Consultants Inc. in Bloomfield Hills, Michigan. ``It doesn't cost much to bend the sheet metal a little differently to improve the looks, so that's an easy option.''
The drop for Accord, as well as the Civic -- a small car that is Honda's second-biggest selling U.S. model -- cut the company's U.S. sales 0.7 percent this year through May to 565,948. Civic sales are down 15 percent this year, in part because Honda has reduced production ahead of the release of a redesigned version due in about three months.
In spite of the declines so far this year, Honda will post a twelfth consecutive year of overall U.S. sales growth, said Mendel, who declined to estimate a percentage increase.
The company, the fifth-biggest automaker in terms of U.S. sales, has relied more on cars than its larger competitors, General Motors Corp., Ford Motor Co., DaimlerChrysler AG and Toyota Motor Corp., which sell more pickup trucks, sport-utility vehicles and vans.
Amid falling U.S. demand for cars Honda has added its first pickup, boosted production of SUVs and minivans and plans a second SUV for its luxury Acura line. Honda builds its North American Accord mainly at a plant in Marysville, Ohio.
Accord sales may have also been hurt this year as Honda dealers focused more on selling newer, more expensive models such as the Ridgeline pickup and Pilot SUV, Sanfilippo said. ``My sense is a lot of dealers are a little bit enamored with selling these new trucks,'' he said.
Expanding competition and rising incentives in a ``mature'' segment of the U.S. auto market have contributed to Accord's slump, said Mendel, 50, senior vice president for the company's U.S. auto operations and who this year succeeded former sales chief Tom Elliott.
Midsize sedans ``are the Fallujah of the car industry,'' Mendel said. ``Everybody is basically pounding away with everything they've got.'' Honda still expects to maintain average annual sales volume on Accord of about 400,000 units, he said.