Acura reverses product plans

Acura is reversing course in North America as the brand suffers through the shift from high-performance luxury vehicles and the cancellation of its V8 and rear-wheel-drive programs.

There is "a certain level of confusion" about Acura in the marketplace, Honda Motor Co. CEO Takanobu Ito told Automotive News at the Tokyo auto show. "We are in the midst of big changes. We've changed the direction of research and development."

It appeared that Honda finally had acquiesced to matching top-tier luxury brands with V8 and rear-drive vehicles--only to scrap those plans after the Lehman Bros. collapse and the economic tumble that followed. That has sent engineers and designers back to the drawing board, Ito said.

"Pre-Lehman, we did have the idea to produce more multicylinder engines," Ito said through an interpreter. "I see the future of Acura as a merger of BMW and Audi--something between high technology and high performance."

As a result of this midstream change, Acura will be in a "low-growth period of developing new products," Ito said.

"We were thinking that we could come up with glamorous, gorgeous products that would sell. Now, our premium products will be expressed in advanced environmental technologies, rather than glamorous things attached to the product," he said.

The change has unsettled Acura dealers who recently invested in fancy showrooms designed to compete against Mercedes-Benz, BMW and Lexus.

Eighteen months ago, Acura dealers were promised five additional products, which would have given them a total of 10 nameplates. But all that has changed.

Acura dealers were informed of the reversal at last week's national dealer meeting in Chicago.

Multifranchise dealer Dave Conant, who built an Acura store in Mission Viejo, Calif., said he admires Acura's candor about its predicament but says many dealers may not be able to wait out the transition.

"The direction of product will be completely different from where it was a few years ago," Conant said. "The previous direction of shooting for being a Tier 1 luxury brand is not going to be the same."

Dealers have blanched at the brand's flailing to find its niche among performance, efficiency, luxury and technology. At American Honda Motor Co.'s urging, many dealers recently had built Taj Majal showrooms, which opened just as the recession hit.

Acura is suffering through its fourth straight year of declining sales. A brand that once sold more than 200,000 units annually will be lucky to sell half that number this year.

Not that the product pipeline is barren. At the dealer meeting, Acura executives revealed that a wagon version of the TSX--a reskinned version of the European Honda Accord wagon--will arrive next fall. It joins the ZDX crossover arriving this winter, but both products are low-volume additions and are not expected to make much of an impact in the market.

Acura officials hinted at a return to the entry-luxury segment to compete against the BMW 1 series and Audi A1. Hybrid vehicles also will be part of the plan. No timelines were given for those vehicles.

"They talked a lot about smart, efficient and sensible luxury vehicles, not big, in-your-face luxury cars that don't make sense," said Jim Brown, general manager of Ron Tonkin Acura in Portland, Ore. "They said there will be a new product introduced every year. ... But there also is a delay in the pipeline."

By Mark Rechtin and Jason Stein- Automotive News