It would be a stretch to suggest Honda's Acura premium brand is broken, though no one would argue it's in a bad way and needs some serious rehabilitation.
Jerry Chenkin, Honda/Acura Canada executive vice-president, is willing to admit as much, as is Honda Motor Co. CEO Takanobu Ito.
"Sales started sliding in 2007 and they have been hard to stabilize," said Chenkin, adding the company had "great expectations" for the redesigned TL midsize car and those expectations were dashed by long-time Acura owners who completely rejected the radically restyled sedan.
Chenkin said Acura will likely sell 16,000 vehicles in Canada this year, but 20,000 is what's needed to keep Acura and its dealers happy and profitable.
Ito was far blunter in his assessment of Acura a few days ago at the Tokyo Motor Show: "We are not satisfied with Acura's current positioning," Ito told Automotive News. "We want to showcase interesting and fun technologies and show excellent environmental performance."
That, in a nutshell, is the plan for Acura and the proof -- such as it is in the car business -- will be in upcoming new models and concepts. There is a long list of them. The most exciting news of all has to do with the NSX concept super car that will be unveiled in January at the Detroit auto show.
The car is stunning -- low-slung, dangerous looking but not over-the-top-edgy and fast. Performance will come from the latest version of Acura's hybrid technology combined with a new take on Super-Handling All-Wheel Drive or SH-AWD in Acura-speak.
Power? A direct-injection V-6 teamed with a lithium ion battery pack. For extra boost, the car will have an electric motor tied to the drivetrain positioned amidships and an electric motor at each rear wheel to deliver AWD and just a little more oomph.
Acura also plans to launch a new compact sedan called the ILX in the spring. It rides on Honda's global Civic platform, though the two cars look completely different. The ILX will replace two cars in Acura's Canadian lineup: the CSX, which was a barely-gussied-up Civic, and the TSX, a rebadged version of the Honda Accord sold in Europe.
A redesigned RDX small crossover is coming in the spring, too. Unlike the current car, which has a jiggly ride and a jumpy turbocharged four-cylinder engine, the next RDX will have a V-6 and a suspension tuned more for comfort, less for performance. Next fall a new flagship sedan will replace the current RL, likely with a new name.
And then in the spring of 2013 a redesigned TL will be joined by a reinvented MDX large crossover. The smart money is betting that the ZDX large crossover, a stunning sales disaster, will go away very soon, even though it is Chenkin's company car right now.
The painful truth about Acura is that it has evolved into a heavily discounted SUV brand. That is, 58 per cent of Acura sales in Canada are SUVs. The big seller, the $62,690 MDX, is a solid SUV that competes pretty successfully with the BMW X5s of the world -- but only because it drives off dealer lots with the help of an $8,000 cash incentive.
It's the same story for other Acura models. The outgoing RDX ($40,490) has a $4,000 cash incentive on it. The $24,290 CSX, if you find one now that the car is no longer in production, has a $2,500 sales sweetener in play. The RL sedan ($64,690)? How about $5,000 in cash incentives, plus whatever you can squeeze out of the dealer. Acura seems to have given up on the ZDX ($64,690) altogether; the only offer is cut-rate financing. And it's the same story for the TL -- no juicy deals are officially in play on another shockingly unsuccessful Acura model.
For now, Acura is counting on the MDX to keep the cash flowing until the new products come to the rescue. Chenkin says Acura must and will reestablish itself as a legitimate luxury brand, though Acura's vision of luxury or of premium vehicles will be different than the big German brands like BMW, Mercedes-Benz and Audi, as well as those from Japan -- Lexus and Infiniti.
Chenkin and other Acura officials, however, deny reports out of the United States that an overhauled Acura will abandon top-tier luxury-car status. They also say that the line between top tier luxury vehicles and mainstream ones is at least blurring and they have a point.
Mercedes, for instance, sells a $30,000-something minivan with hinged doors called the B-Class and has been very successful with it. Audi in Canada has the $34,100 A3 and Lexus sells a $30,950 front-wheel-drive hatchback called the CT 200h.
The Acura types argue that the move downmarket by the heavy hitters in luxury cars -- BMW, Mercedes, Lexus and so on -- puts Acura in position to compete with all the top tier brands on price, features, design and functionality.
Acura's hope is to stir some much-needed emotion in potential buyers with sharp designs and nifty technologies that best take advantage of the driver's abilities. The sales hook will be rational, though -- offer more car for less money than the competition.
The RL replacement is a perfect example. "It will have (BMW) 7-Series cabin space with the agility of a 5-Series," said Chenkin. "Our sedans need to instill passion and emotion."
The new Acura flagship, this mysterious RL successor, will be the priciest Acura in the lineup, too -- until the new NSX comes perhaps a year from now.
The NSX news is the most tangible indication of just how important Honda views the future of Acura. The original NSX was launched in 1991 when Honda and Acura were brimming with creativity and confidence. By the time the car went away in 2004, Honda had surely begun heading down the road to complacency and that spilled into Acura.
Honda CEO Ito seems to understand the difficult spot he and his company find themselves. Ito is the one who killed a previous NSX concept after the autumn 2008 Lehman Brothers meltdown and the financial catastrophe that ensued. The idea was to marshal resources and ride out the storm.
That bunker mentality might have allowed Honda to remain viable and profitable in the short term, but it seems also to have made the company overly conservative and incapable or unwilling to recognize how this narrow focus was undermining Honda and Acura products -- and leading the company to underestimate the fierce competition emerging in the form of the Hyundai-Kia alliance of South Korea.
Indeed, as The New York Times reported, Ito and other Honda executives at the Tokyo Motor Show conceded that they took their eyes off the competition and the customer.
"We now understand that customers expect a lot from Honda. Customers want more innovation," Yoshiharu Yamamoto, president of Honda R&D Co., the automaker's development arm, said. "That's something we've learned this time."
Chenkin added that Honda has the will and the resources to reinvent its products and how they supported by dealers and the factory. For Acura, that means nothing less than an entirely new lineup and a thoroughly new approach to customer service.
Word has it that all this Acura news had some dealers literally weeping for joy as they viewed the prototypes of the new vehicles -- especially the mid-engine NSX. That's a switch for Acura dealers and their customers who for year have been crying the blues.
