Acura to Tweak ILX in Quest to Shed ‘Near-Luxury’ Label

Acura is set to begin the uphill climb to remake its image and secure more firm footing in the competitive American luxury vehicle marketplace, with planned changes to its new entry-level sedan in 2013.

The ILX was intended to attract a younger, more affluent buyer, but sales have missed the mark. Acura finished 2012 with 12,251 deliveries of the ILX, well short of the 30,000 originally targeted.

“(The ILX is) not hitting our sales expectations,” American Honda President John Mendel says during a discussion with reporters at November’s Los Angeles Auto Show. “Consumers have told us they like the 2.4L and they wish they had an automatic, but they say the midrange vehicle is underpowered and they don’t see the value in it.”

The model currently is offered with a choice of three powertrains: a 2.4L with a manual transmission; a 2.0L with automatic transmission and a 1.5L hybrid variant with a continuously variable transmission. Mendel says the ILX originally was going to debut with an automatic transmission option with the 2.4L engine, and engineers are “working to fulfill that.

“We’re doing some value enhancements on the car,” he adds. “We’re planning some as we go forward. But I think, overall, we have a good plan for ILX. It is bringing in buyers to Acura we had wanted, as in first-time luxury (buyers) or move-ups.

“We had a little bit overestimated the size and the growth of that segment to begin with. But it’s probably getting two-thirds of our (volume) expectations. The nice part is that it’s increasing every month, catching on more. It’s accepted. It’s kind of a growing segment.”

Despite targeting upwardly mobile male drivers in a recent ad campaign, more women have been drawn to the car than expected. And the model was the highest-selling sedan in Acura’s lineup in December, outpacing the TL by just 239 deliveries.

Acura has been dogged for years as a “near-luxury” brand, having premium prices without the premium perks. Top Honda executives are well aware of the derisive claims and have devised a strategy for Acura to better compete with BMW, Infiniti and Lexus without matching them pound for pound and dollar for dollar.

This year, the brand will emphasize “smart luxury” to erase the near-luxury label stuck on drivers’ minds.

“The near-luxury label is fine, if that’s what you want to be,” Mendel says. “We talked about this idea of smart luxury. That’s the intelligent use of technology intuitively. It’s the synergy of man and machine…where you dynamically feel at one with your car, but it doesn’t take over your skills.”

Acura’s short-term success also rides on the RLX fullsize sedan, which assumes its place at the top of the chain from the outgoing ZDX midsize cross/utility vehicle. Mendel and Honda Chief Engineer Art St. Cyr acknowledge there was a misstep with the poorly received ZDX.

“The RLX is a true flagship,” St. Cyr says. “The ZDX was a very nice vehicle that (arrived when) the market changed. That car was a very good car; the customers that bought it really liked it. It just didn’t resonate in the market that we have.”

“ZDX did not have an existing segment,” Mendel notes. “It kind of sat in that unique area. It had some issues with rear-seat access. RLX comes into that luxury segment to compete against the true luxury interior” and will come more well-equipped than the previous RL sedan.

The luxury market will be watched closely this year. Lincoln is in the midst of a massive image makeover, Cadillac will introduce a premium electric vehicle and Infiniti revamps its nomenclature for future models. Mazda has said it could enter the premium segment as well.

“I perceive everybody as competition,” Mendel says. “Mazda’s been down that road before. We know how difficult it is to try to break through to that luxury thing, as do others. Certainly they could be competition if they get it right.”

Mendel does not reveal plans about future product, but does say Acura will defer to a size hierarchy that could possibly lead to the discontinuation of at least one of its current models.

“One of the problems that Acura has had is this sort of overlap. (With) TSX, TL and RL, you could hide one behind the other (and) behind the other; they were kind of the same size, same dynamic.”

The RLX, Mendel says, has a BMW “5-Series exterior and 7-Series interior,” and will target affluent buyers through a variety of marketing, including the auto maker’s current partnership with the upscale W hotel chain.

“We have never had a true flagship sedan. And almost all luxury brands are defined by their luxury sedans or sports cars,” he says. “At a time when we need it, we will be delivering to the marketplace our signature in terms of smart luxury and the products that embody this synergy between man and machine.”

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