Japanese Move into Luxury Performance Auto Market

Article excerpt

DETROIT - The new luxury, high-performance model that the American Honda Motor Co. will introduce later this month is likely to r aise the eyebrows of current Honda owners used to more Spartan cars. It comes with a high-tech 151-horsepower V-6 engine, a racing style suspension, plush interior and a sticker price close to $20,000. It is not even called a Honda.

The company's new Acura line - which centers on the top-of-the-line V-6 Legend but will also include the smaller four-cylinder Integra - is the strongest indication yet that the Japanese auto makers are determined to push into the highly profitable and growing American market for luxury performance cars. With the Acura, a new 200-horsepower Toyota Supra, Mazda's RX-7 Turbo and Nissan's 300 ZX,the Japanese are going after the market now dominated by such European manufacturers as Mercedes-Benz, BMW, Audi, Porsche and Saab.^ @The few American entries in this category include the Chevrolet Corvette and Lincoln Mark 7 LSC, although others are under development.

""The Legend is a legitimate competitor for BMW,'' said Ann C. Knight, an auto industry analyst with Paine Webber Inc. ""The question is whether they can break through the cult-like loyalty to the German products. They probably can't do it on price. The more Mercedes-Benz charges, the more people seem to like it.''

Honda officials acknowledge that the need to create the proper image for the cars was a major factor in their decision to establish a new division and a separate franchise to market the new models.Acura dealerships - 60 to begin with - are free-standing operations unrelated to other Honda outlets, although there is some common ownership. The goal is to break away from Honda's reputation for utilitarian, but not very exciting, automobiles.

""Customers in upscale market segments do not include current Honda products in their purchase considerations,'' the company said, because of its ""reputation for low-priced, high-fuel economy cars.'' But with the Acura, Honda hopes to change that thinking. It expects to sell 50,000 Acura models this year, and is projecting sales in the hundreds of thousands by the end of the decade.

Other Japanese companies are watching the Acura experiment closely. Officials of the Toyota Motor Corp., Japan's leading auto maker, have said they might introduce a new brand name in the United States if Honda was successful.

Selling different lines of cars through separate distribution networks is common in Japan, and is what the General Motors Corp. …