News Column

Has Acura Lost Its Edge?

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When Acura pulled the cover off its next-generation NSX supercar at the Detroit auto show in January, the racy design raised pulses, but the timing hoisted warning flags.

NSX isn't due in showrooms for three years, yet Honda's luxury brand showed the car, then spent a fortune in February to feature it in the brand's first Super Bowl ad.

"You don't pull the wraps off what you're doing years from now if everything's hunky-dory. You see that from companies not doing particularly well," says Jack Nerad, executive editorial director at auto research site kbb.com.

More bluntly, Automobile magazine on its June cover called Acura "a lost brand."

Acura was the first Japanese nameplate to take on the U.S. luxury market -- its 1986 Legend and Integra pre-dating 1990-model Lexus and Infiniti cars. And it remains Honda Motor's best foot forward, showcasing the company's most advanced technology.

Yet, industry watchers say, Acura long ago let go of the advantages of its head start and its technology.

"They really were ahead of the game at one point. Now what they have is about even with everybody else. They've lost that edge," says Ivan Drury, manager of pricing and industry analysis at auto research site Edmunds.com.

Acura disputes that view.

"We're coming off an absolutely nightmarish year in which we still outpaced Audi and Infiniti, our two primary competitors," says Michael Accavitti, Acura's vice president in charge of U.S. marketing. "This year, we're not only beating Audi and Infiniti (in sales), but also Jaguar and Lincoln and others."

Acura was hit harder than others last year by the tsunami in Japan, where most Japanese-brand luxury models are made. Acura's U.S. sales last year were down 7.7% in a new vehicle market up 10.3%, according to sales tracker Autodata.

This year, Acura sales are better: up 10.8% in the January through May period vs. year-ago tallies, according to Autodata. In the same period, Infiniti is up 7.2%, and Audi is up 14.5%. And Acura's total sales, Accavitti points out, are greater than either Infiniti or Audi.

"We're focused on what the brand stands for, have a solid product strategy for the future, and there's clarity among all the executives" about the brand's image, Accavitti says.

From the outside, however, it's not so clear. "Acura has certainly moved away from what many of us recognize" as the foundation of the brand -- nimble, sporty cars, says Drury.

"Lost their way? Maybe not exactly," he says, but certainly, Acura has changed.

It has, he notes, "turned into a luxury SUV maker. Its MDX has been its best seller the last few years and typically is one-third of all Acura sales."

Nothing wrong with SUVs; they are big business. But in Acura's case, the prominence of a three-row, family-style SUV seems to have pushed the brand's luxury image toward the mainstream.

Drury points to Edmunds.com data showing that about 21% of people who consider buying Acuras also look at Toyotas; nearly 19% cross-shop Hondas. Further, fewer than 13% of people looking at rival Audi also consider Acura, and about 17% of Infiniti shoppers cross-shop Acuras.

In other words, car shoppers seem more inclined to consider Toyotas and Hondas -- not Audis and Infinitis -- as the equivalent of Acuras.

Most luxury brands, by contrast, share shoppers' short lists with other premium nameplates. For example, about 30% of people who consider an Audi also look at a BMW, Edmunds.com data show.

Among car shoppers, "there is a bit of questioning as to where (Acura's) exact competition lives," Drury says.

Acura's new models should improve its sales, but the initial ones have been smaller, lower-price vehicles unlikely to burnish the high-end image that lets a brand command high prices and premium profits.

Here is the key new hardware:

RDX. The latest version of the compact, five-seat crossover SUV, starting at about $35,000, is intended to hit what the first version missed.

"The original RDX was targeted where we thought the market was going to go," Accavitti says. "But we found it was biased toward people who wanted more comfort" than the edgy, turbocharged four-cylinder original RDX provided.

The 2013, as a result, is slightly bigger, outside and in, is powered by a smoother V-6 and is tailored for a smooth ride.

Bull's-eye: It went on sale April 2, and in May, snuggled up behind the MDX to become Acura's No. 2 seller, displacing the TL and TSX sedans. RDX's May sales more than tripled those of its predecessor a year ago.

ILX. A recasting of the Honda Civic, it's new to the Acura line and just went on sale as the entry-level Acura, starting at about $27,000.

Only a few were sold last month because only a few were in stock.

The brand sees this lowest-price model as a "gateway" car to bring new buyers into Acura showrooms. "A lot of people are going that (lower-price) route," Nerad says, so ILX could drive up sales volume important to the Acura dealerships.

Industry watchers are of two minds about ILX:

One view is that it's a return to the nimble, small-car roots of the brand's original Integra, making it a smart move and a likely sales success.

The other view is that it's too much like the Civic on which it's based, and the similarity is too well known to wow luxury-brand buyers.

"You'll see a lot of comparisons to both the Integra and the Civic," Drury says.

RLX. A concept car unveiled at the New York auto show in April, it's a harbinger of the sedan that will replace the brand's aging flagship RL early next year.

RL, priced at about $49,000 to $57,000, is almost a nonentity, its sales down to a few dozen a month. Partly that's deliberate as Acura avoids overstock it would have to discount as the new one arrives.

The RL is an excellent symbol of Acura's struggle, Nerad says. Though it's the brand's top sedan, Acura's "resisted doing a V-8 engine, saying 'Oh, a V-6 can do it.' That's probably true, but it's not luxury." All other luxury brands offer V-8s.

The RLX concept, believed close to the showroom version, also eschews a V-8.

The top model will have a gas-electric hybrid system using a V-6 engine and three electric motors for an all-wheel-drive car that Acura says will be rated at least 370 horsepower and -- just as important in Acura's mind -- get a rating of 30 miles per gallon in every driving mode.

A conventional 310-hp V-6, front-drive model of the redone flagship also will be available.

NSX. Unveiled in January at the North American International Auto Show in Detroit, the high-performance sports car is to have a hybrid all-wheel-drive system similar to that in the RLX and was promised "within three years."

It revives, thematically if not literally, a model built from 1990 through 2005, but this time it will be developed and manufactured in Ohio instead of Japan.

Other Japanese premium brands also are rethinking their identities and places in the luxury market in the face of strong gains by European upscale brands.

Lexus, Toyota's high-end brand, is trying to reinvent itself as more like BMW, recasting each new car model to be crisper-handling, quicker and sportier-looking.

The 2013 GS 350 sedan, on sale since February, is the first, and is selling five to six times as fast as its predecessor.

Infiniti, Nissan's high-end brand known for edgy styling and rear-drive performance, is going a different direction. It just launched the 2013 JX 35, a big crossover SUV based on front-drive hardware more like what's in Nissan products than in any other Infiniti.

The JX rolled out in March, and in April, its first full month, did what Infiniti forecast: It became the brand's second-best-selling model, after the G entry-model sedans. Same in May.

Acura, though, has a unique issue related to its Honda roots that may limit its flexibility in seeking a more distinct identity.

Say Nerad: "Acura is a product of, and in some ways a victim of, how Honda goes about doing business -- an engineering company that's all about efficiency. Luxury isn't about efficiency."