Honda: Weather, Competitor Deals Hurt Accord

SAN DIEGO – Honda's Accord has had a rough 2014.

Sales of the midsize sedan and coupe slumped in both January and February, shrinking the car's volume 12.9% from the first two months of 2013.

It's an atypical dip for the model, at least at this early stage in its lifecycle. Traditionally the second-best-selling midsize sedan in the U.S. after Toyota's Camry, the current-generation Accord went on sale in fall 2012.

But a top company official says it isn't so much that desirability is waning for the Accord as it is Mother Nature making it unpleasant to shop. In addition, other manufacturers are offering consumer come-ons that have been hard for some shoppers to resist.

“I'm new enough on the job that I don't know all the answers, but what I do know is, in talking with some number of people, weather has been a big hit (to auto sales),” Jeff Conrad, American Honda senior vice president and general manager-Honda Div., says in an interview here during a '15 Honda Fit media preview.

WardsAuto estimated the brutally cold and snowy winter in the eastern U.S. curtailed 75,000 new-car purchases in January and February, equating to 3% of projected demand.

But Conrad, installed in his new position in mid-March after a stint heading Acura, says bad weather alone can't explain the Accord's decline, as demand for other midsize cars has risen.

One of the Accord's competitors that is on the rise this year is Nissan's Altima, which saw deliveries climb 8.5% through February to 53,364 units, overtaking not only the Accord's 2-month tally of 45,226 but also the Camry's 52,330 deliveries.

“My understanding is there's been an awful lot of emphasis on their fleet business to keep their numbers up where they are, (and) coupled with that, they've also (thrown) an incredible amount of incentive money (on the hood),” Conrad says.

Nissan doesn't disclose its fleet volume, but historically it has been highest among all Japanese brands, outpacing Toyota's 10% share of sales and Honda's estimated 1%-2%.

Honda doesn't maintain a fleet-sales unit in the U.S. but allows its dealers to sell directly to fleet customers.

On incentives, Nissan has been more generous than Honda.

TrueCar estimates Nissan/Infiniti's average February incentive at $2,613, fourth-highest among eight manufacturers, while Honda/Acura's $2,043 was the third-lowest average for the month.

Edmunds.com shows $2,500 in dealer cash available for ’13 Altima 4-doors and 0% financing for 60 months or $1,000 in customer cash on ’14 Altima sedans.

Buyers of the ’13 Accord sedan can get $1,000 in dealer cash, which can be combined with 0.9% financing for 60 months, and ’14 Accord 4-door buyers are being offered 1.9% financing for 60 months with $500 dealer cash.

While Honda likes to be on the lower rung of the incentives ladder, Conrad says, the automaker strategically will lift spiffs when required, depending on demand fluctuations and the need to clear out excessive inventory of prior model-year vehicles.

Wooing buyers may get tougher for the Accord this year as the Camry, its most cross-shopped model, gets refreshed. Toyota will debut what's being billed as a heavily updated Camry in mid-April at the New York auto show.

Conrad is mum on when a midcycle change for the Accord will occur. WardsAuto forecasts a full redesign of the Honda in ’18, meaning a refresh could come as soon as ’15 or not until ’16.

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