Honda expects to sell 40,000 Acura ILX

Dec. 12 (Bloomberg) -- Honda Motor Co., seeking to revive its Acura luxury brand, is introducing a sedan intended for younger buyers unable to afford higher-end marques. It’s part of an effort to improve Acura’s image with new models.

The compact ILX is aimed at “Generation-Y” drivers who are turning 30, Honda said at a briefing in Las Vegas this month. The sedan will start “well under $30,000” when it goes on sale in early 2012, and will be shown next month at the Detroit auto show, said Vicki Poponi, assistant vice president for product planning at Honda’s U.S. unit.

“The brand is in trouble,” said Jessica Caldwell, an analyst for researcher Edmunds.com. “The consensus for many of the current models is the vehicles just look bland. They have to do something to capture peoples’ emotions with styling.”

Acura, like the Honda brand, is struggling this year from reduced production triggered by natural disasters and a model line that hasn’t drawn as much attention as those of Volkswagen AG’s Audi, Bayerische Motoren Werke AG’s BMW and Daimler AG’s Mercedes-Benz. Acura sales slid 6.7 percent through November, compared with gains of 15 percent for Audi, 12 percent for BMW and 12 percent for Mercedes’ luxury models.

With its new models Tokyo-based Honda plans to tout Acura’s lineup as “smart luxury” vehicles that combine fuel efficiency, driving performance and value for money.

Honda also will show its revamped Accord coupe in Detroit next month, the company said on its website. Both the coupe and a new sedan go on sale in late 2012, the company said, without elaborating.

Gen-Y Emphasis

Sales for Acura will rise in 2012, buoyed by the ILX and a revamped RDX compact utility vehicle that’s also to be shown in Detroit in January, said John Mendel, Honda’s executive vice president of U.S. sales.

Honda expects to sell 40,000 ILX sedans annually. Acura brand sales totaled 110,170 this year through November. Mendel declined to provide Acura’s volume goal for next year.

While baby boomers account for the majority of luxury sales, Acura is preparing for their children, who are entering the auto market, said Michael Accavitti, Honda’s vice president of U.S. marketing. The group, born since about 1980, covers as many as 80 million people, he said.

“Gen-Y consumers aspire to luxury still, but they need some help getting there,” he said. “They are projected to be the first generation in the modern era to earn less than their parents.”

Powertrain Options

The ILX will be available with three powertrain options: a 2-liter engine with an automatic transmission; a sportier 2.4- liter, manual transmission model; and a hybrid version with a 1.5-liter engine, Poponi said. The ILX will be built at Honda’s Greensburg, Indiana, plant, which makes Civic compacts.

The hybrid version will be Honda’s first gasoline-electric auto built in North America, the company said today.

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