Honda's Acura Line Makes Headway in Luxury Auto Market

By Case, Patti | THE JOURNAL RECORD, July 21, 1987 | Go to article overview

Honda's Acura Line Makes Headway in Luxury Auto Market


Case, Patti, THE JOURNAL RECORD


Honda Motor Co. Ltd., which has already proved itself a superb maker and marketer of small cars in the United States, appears to be making considerable headway in the top-of-the-line luxury market it entered last year with the new Acura line.

The Tokyo-based company has reached for affluent customers with its new Acura line, seeking to compete with such high-priced brands as Mercedes-Benz and BMW.

The big question now is whether Honda will be as successful selling cars with price tags of $20,000 and more as it has been with cars bearing stickers in the $8,000-$15,000 range.

It is too soon to pronounce the Acura a long-term success, but the early results are promising.

Don Carlton Acura of Oklahoma City, which opened April 1, 1986, at 1515 Northwest Expressway, is holding its own in the market, according to Bob Davis, general manager. Sales in Oklahoma City for the solo Acura dealership are projected at 650 cars from January 1987 to January 1988.

"As of this point, I am running a little behind my projections," he said. "But the only reason we will not sell that many by January is a lack of product.

"In December and January, when business was bad (and there were fewer dealers to share the supply with), I had a 75-day supply. As of yesterday, I had a 14-day supply. As you can see, I lack product."

The four-door Legend has been joined by a coupe model, in addition to the Integra, further boosting sales, he said. By fall, a new, larger four-door sedan is to be introduced with a V-8 engine, Davis reported.

Sales began slowly last year, as buyers took a while to accept the name and the notion of a Japanese car priced above $20,000. But the two Acura models, the Integra and the Legend, got rave reviews - the only complaints focused on their unadventurous styling. As more dealers were added, sales began to increase, and by the end of the year 52,869 Acuras had been sold, just short of the goal of 55,000.

In June alone, Acura sold 9,609 cars, according to Davis. By comparison, he gave this run-down of competing models:

Volvo sold 9,083 cars; Sterling sold 1,160; Saab sold 4,279; Mercedes, 7,273; BMW 7,711; Audi sold 7,915.

Adding a little "hands-tied-behind-our-backs" braggadocio, Davis said those results were during a time when supply was not sufficient to keep up with demand.

The cars are re-selling off used car lots at a brisk rate, as well, he said.

"A 1986 Acura Legend with 15,000 miles will bring in the range of $19,000 on the used car lot. Those cars sold for $18,800 new," he added. "That is value."

The Oklahoma City Acura buyers, which Davis said fit national trends, include about 30 to 35 percent former high-line European luxury car owners, or owners of other mid-range Japanese competitors, such as the Toyota Cressida. Another 35 to 40 percent are former owners of high-line General Motors Corp. cars - like Cadillac, Pontiac and Buick.

About 25 percent are Honda owners upgrading to the Acura.

Honda is bringing to the task the same kind of do-or-die determination that has made it Japan's largest seller of cars in United States. And in its present challenge, Honda can benefit from its strong reputation in the United States.

Perceived at first as low-cost, economical cars, Hondas are now seen by buyers as the "Mercedes-Benz of small cars," according to John Dinkel, the editor of Road & Track magazine. …

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