By on December 20, 2011


It’s been a fascinating year for the compact car, as all six of the segment’s leading competitors brought out new or updated models over the last 18 months. But as our Chart Of The Day shows, the competition has hardly sent the segment into overdrive, as after an early-year boom, compact car sales have slackened considerably. Intriguingly though, Honda and Toyota, which lost sales early this year due to supply interruptions in the wake of the Japanese Tsunami, seem to be the only brands with recovering compact sales. What’s especially interesting about this is the fact that Toyota’s modest refresh and Honda’s poorly-received new Civic were once widely considered by automotive pundits to be under threat from the resurgent competition. Indeed, Honda’s Civic has been especially hard-hit by media criticism, earning a harsh review from TTAC’s Michael Karesh, losing its coveted “recommended” rating from Consumer Reports, and engaging in some ugly media-bashing. But now that the Civic seems to be one of the only compacts to enjoy a late-year sales rebound, Honda’s announcing that it will be upgrading the Civic for the 2013 model-year, just one year after the new model was introduced.

Tetsuo Iwamura, Honda’s top North American executive tells Bloomberg that

Civic is a good product; of course the expectation of the marketplace for Honda product is quite high. We have to once again make it great. The gap between Civic and the competitors has been narrowed. We have to once again make the gap wider.

Honda has not yet announced any specifics about its planned 2013 upgrades to Civic, preferring instead to let Sales VP John Mendel hammer home the relative nature of Civic’s fall from grace. Mendel tells Bloomberg

We disagree with [Consumer Reports]. Did they make some points? Yes they did. We haven’t gotten worse, everybody else has gotten better. Where we used to be four or five laps ahead in the race, there’s more people on the same lap with us.

Moreover, Honda’s execs argue that inventory levels, not product weaknesses are the cause of relatively low Civic sales, as Bloomberg reports

The company has about 117,000 models in inventory, or a 41-day supply, less than half what it should have, Iwamura said.

“Hopefully, by the end of March next year” Honda will have full inventory, Iwamura said. “If John could sell more, then it will be the end of April or May.”

Honda has set a target to increase U.S. sales of its namesake brand to 1.25 million models next year, from about 1 million this year, Iwamura said. It plans to boost sales of its Acura luxury line by 43 percent to 180,000 from about 126,000 this year, he said.

“It looks like quite a high jump, but because of the availability problem we had a really low year this year,” Iwamura said. “That is the reason why growth looks huge, but for us, it’s a natural growth.”

Of course, there are a few problems with this line of reasoning. First, and most obviously, why is Civic receiving an “upgrade” after one year on the market if there’s nothing wrong with it? Second, since when is an 80+ day inventory ideal? Wasn’t this industry supposed to be moving away from the stack-em-high-and-sell-em-cheap ethos? Inventory levels may be a convenient scapegoat for weaker-than-hoped-for sales numbers, but financial results in this industry are closely tied to keeping those inventories from running out of control. And considering Civic is one of the only compact cars showing signs of recovery in recent months, it seems that both the upgrade and the professed need for a skyrocketing inventory may not be as necessary as Honda now seems to think. In any case, we’ll see how Honda’s upgrades affect the quality of the Civic, and we’ll be watching this segment closely to see how this brutal competition pans out…

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4 Comments on “After One Year On The Market, Honda “Upgrading” 2013 Civic...”

  • avatar

    That is quite a high bar to set for Acura. Is the 2013 Acura Civic going to be this “upgrade” then? Some things in that bloomberg article dont quite add up.

  • avatar

    Brand loyalty is a powerful thing, but it can only last so long. Hopefully they got the message and will actually make this car competitive again. I always liked Civics but this one more closely matches the Cobalt for interior quality.

  • avatar

    To answerjohnhowinton’s question, no the Acura Civic is not the upgrade, that is a different car completely (even though still heavily based on the Civic). The upgrades, at least from a non-powertrain point of view, will be focused on increased soft-touch materials and overall appeal (read more pretty designs) of the interior as well as additional improvements to noise levels. No matter what Honda PR is saying, they are worried about the vehicle and want to improve it as much and as fast as possible.

  • avatar

    We also need to add in the fact that Honda was not happy with original redesign of the 2011 model and delayed it one year to make changes as the 2012 model. I wonder how bad the first version was. Then Honda releases a dud and well it flops but then Honda blames the press for its bad press as it was the public’s fault not Hondas (sounds like Old GM thinking). Now looks like Honda is finally looking within at its own failures and I wonder if changes will be made to prevent the Acura Schnoz, the 2012 Civic, the umpteenth NSX concept, ruins the Honda hatchback image with the last gen Si hatchback (crappy suspension, mediocre engine, and small crappy tires), the Ridgeline that gives you a v6 powered truck with the fuel thirst of a large v8 with ugly styling, the pull out of a promise of a inline 4 and v6 turbo diesels that would make their way into the Pilot, Ridgeline, and passenger cars. Nope Honda still thinks Hybrids are more important as we all know how much hot sellers they are especially the CR-Z which gives you the great combination of the sportiness of a Civic with the fuel economy of a Civic and the expense of a complicated hybrid drivetrain.

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