Civic’s Duty: Help Honda Rebound
David Conant, Honda’s highest-volume dealer, is eagerly awaiting Sept. 15, the day the first of the new generation of Civics arrive on his lots.
There’s a lot riding on the car. Honda is the house that Civic built in the United States, but in recent years the compact model has lost some of its of luster.
“The old car had its shortcomings -- it lost its youth appeal,” said Conant, whose holdings include the Norm Reeves Honda dealerships in Cerritos, Huntington Beach and West Covina.
The four 2006 Civic models, with more powerful engines, sleek new designs, upgraded interiors, better fuel economy and more standard safety features, are an attempt by Japan’s third-largest automaker to reignite Civic’s fire -- and Honda’s sales -- in the U.S.
Civic and midsized Accord models account for almost half of Honda Motor Co.'s U.S. sales, but demand for both has dropped this year. As a result, while rivals Toyota Motor Corp. and Nissan Motor Co. are posting double-digit percentage sales increases, Honda sales are up just 2.4%.
The company needs strong Civic sales to help it maintain its passenger car volume in a shrinking market.
“This is a critical launch for us,” said John Mendel, vice president for Honda division automotive operations at Torrance-based American Honda Motor Co.
“The Civic is the entry to the Honda brand for many, many people,” he said.
Conant, who has been briefed on the new models, said he was “excited about the prospects -- they seem to have addressed all the problems.”
The company’s new marketing tagline, “Civic: It will reverse your thinking,” acknowledges the product line’s slipping image and promises that the new models will be a cure.
The big problem has been the loss of the buzz about Honda that previous generations of the Civic created, back when used models were highly desired by high school and college students with a yen to customize their rides.
It was those young Honda fans who often pushed their parents into dealer showrooms and who, as they grew up and started earning money of their own, maintained their loyalty to the brand.
“It has been the car that introduces people to Honda and keeps them in the family” as they move into Accords and Pilot sport utility vehicles and finally upscale Acura models, said Jesse Toprak, senior analyst at auto market information provider Edmunds.com in Santa Monica.
Since its introduction in 1973, just as an oil shortage made economy cars popular, the Civic has been Honda’s “everything” car: a vehicle for those too young to buy to aspire to; an affordable first new car; a car for young families; and a comfortable and economic commuter car for buyers of all ages and financial backgrounds. The Civic grew steadily -- in size and sales -- through six redesigns.
But with the seventh-generation Civic, launched in 2000, Honda executives chased after the aging baby boomers who had been the Civic’s core buyers. Looking back, they agree with critics that they lost sight of the huge pool of younger buyers in the “echo boom” generations.
The resulting car was comfortable but conservative.
In stressing ride comfort and cost-cutting packaging efficiencies, Honda made the car harder for do-it-yourself performance enthusiasts to customize. Schoolboys who once tacked posters of hopped-up Civics on their bedroom walls began lusting after Subaru WRXs.
Honda executives forgot an industry truism: It is easier to sell a young car to an older buyer than an old car to a young buyer.
Now they’re remembering.
“We need to re-energize the Civic; it’s one of our crown jewels,” said Mendel, a former Ford and Mazda marketing executive. “We want to get a new generation to rediscover Honda as a brand of choice.”
Civic sales remain strong. Honda dealers routinely sell more than 300,000 a year, making it one of the bestselling passenger cars in the U.S. Honda expects to move about 290,000 this year, about 13% below peak sales of 334,562 Civics in 1998.
Increasing competition in the compact segment -- from mainstream models such as Chevrolet’s Cobalt and Ford’s Focus, as well as from imports such as the Mazda3 and Volkswagen Jetta -- have cut into Civic sales.
Honda has even been hit by increased competition from South Korean automakers Hyundai and Kia.
“Their compacts were once considered inferior goods, but today they are pretty darn good cars,” said analyst James Hossack of Tustin-based AutoPacific. In content and quality, he said, “they are getting pretty close to the Civic, and to a lot of people their lower prices and better warranties make them pretty darned attractive, given the diminished Honda image.”
A sure sign of the Civic’s malaise is that in the last seven months, as soaring gasoline prices have touched off a nationwide hunt for fuel-efficient cars, sales of the gas-sipping Civics have dropped almost 12%.
“That shows there’s a problem and that they really need to do something to turn things around,” said analyst Wes Brown of Iceology, a Los Angeles-based consumer research firm.
Tom Peyton, Honda’s senior advertising manager, said the automaker would spend far more than on any other launch in its U.S. history to market the eighth-generation Civic, which has been redesigned from the ground up.
In addition to standard print media and television advertising, Honda will branch out into the Internet, specialty publications and event marketing such as sponsoring concerts and lifestyle events.
A special monthlong Civic-a-day giveaway promotion will be held at Disneyland in Anaheim starting Sept. 15.
For 2006, the Civic lineup consists of a mainstream sedan, a youth-oriented coupe, a gasoline-electric hybrid sedan with a more powerful drive system and a high-performance, 197-horsepower Si coupe intended to win back performance enthusiasts.
Honda is staggering the model introductions, with the sedan and coupe models coming this month. The hybrid sedan will follow in early October and Si in December. A natural gas version of the sedan, called the Civic HX, will arrive early next year.
The company, which in the past has simply assumed that people understood that it made good cars, will begin blowing its own horn with the new Civic, Peyton said.
“That’s something that hasn’t been the case,” dealer Conant said. “But Mendel has all that Ford background, and Peyton came over from Chrysler, and they get it.”
(BEGIN TEXT OF INFOBOX)
By the numbers
Here are some highlights for the four 2006 Civic models:
Price: $14,500 to $21,500; no information yet on individual models.
Powertrain and fuel economy:
Sedan and coupe: 1.8-liter, 140-horsepower engine with five-speed manual transmission (standard) or five-speed automatic (optional). Fuel economy (Honda estimate), 30 miles per gallon in city driving, 40 mpg highway.
Si: 2.0-liter, 197-horsepower, six-speed manual. Fuel economy, 22 mpg city/31 mpg highway.
Hybrid: 110 total horsepower from gasoline engine and electric motor. Constantly variable automatic transmission, with new all-electric drive mode at low speeds. Fuel economy, 50 mpg city/50 mpg highway.
On farm roads outside of Chicago last week, all versions of the new Civic lived up to factory promises of sportier ride and handling and better acceleration and braking than with previous versions.
Transmissions dialed in nicely. The hybrid’s steering is still not as responsive as that of other Civics. The cars were very quiet -- except for the throaty rumble of the Si’s specially tuned exhaust
The dual-level instrument panel, with a digital speed readout high on the dash, helps the driver keep eyes on the road. The sedan is longer, wider and roomier than the ’05; the coupe is shorter but wider, with less room in the back seat.
-- John O’Dell
Source: American Honda MotorLos Angeles Times