Exclusive: With luxury Acura makeover, Honda aims for brand survival, China revival

Sat Jan 9, 2016 8:07am EST
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By Norihiko Shirouzu

BEIJING (Reuters) - As part of a broader makeover, and even the survival, of its stalled luxury Acura brand, Japan's Honda Motor Co (7267.T: Quote) will launch a new small crossover sport utility vehicle this year in China to compete with BMW (BMWG.DE: Quote) and Audi (NSUG.DE: Quote) in the world's biggest car market, two individuals closely involved in the effort said.

Reviving Acura is one of the biggest challenges facing Takahiro Hachigo, who took over as Honda CEO last year. The brand has struggled to carve out a clear identity as a sporty, high-performance luxury label.

Since entering China a decade ago, Acura has struggled, selling just over 4,000 cars last year compared with BMW's 460,000 and Audi's 554,000. And in the United States, where Acura debuted three decades ago, sales have failed to top the 201,000 cars it sold as far back as 2006, according to industry consultant IHS. Sales last year were 179,000, around half the number of cars sold by both BMW and Toyota Motor's (7203.T: Quote) Lexus luxury marquee.

That revival effort will kick off with production mid this year of a China-only sub-compact crossover SUV at a jointly-run plant with Guangzhou Automobile Group (601238.SS: Quote). The new model will have a "crisp, more expressive" style - the result of four years of effort by Honda product planners and engineers - said the two individuals, who asked not to be named as they are not authorized to speak to the media.

"We don't have a strong brand with Acura in China. Our next move could be make or break," one of the individuals said.

A Beijing-based Honda spokeswoman said the new Acura crossover SUV is being developed specially for China and demonstrates the company's commitment to that market. One of the knowledgeable individuals said Acura's China sales unit reckons it could eventually sell about 30,000 of the new crossover SUVs a year.

But the new model's significance goes beyond China, with the styling of the China-only car highlighting the signature feature of a broader Acura makeover.

While the under-wraps China model is unlikely to be unveiled before the Beijing autoshow in April, hints of the new Acura styling should be on show in Detroit on Tuesday.   Continued...

Honda Motor Co President and Chief Executive Takahiro Hachigo speaks next to NSX during a presentation at the 44th Tokyo Motor Show in Tokyo, Japan, in this October 28, 2015 file photo. REUTERS/Yuya Shino/Files