Honda Keeps Intro Humble to Avoid Shooting Itself in the Foot
The coming out party for Honda’s new CR-V has been distinctly lacking in fanfare. The compact crossover debutante hasn’t skipped the ball entirely, but she is certainly being a bit of a wallflower.
Honda’s low-key intro is intentional, as making a big to-do about the model would be a minor disaster at this juncture. It’s a lesson other automakers would be wise to heed.
With the outgoing model continuing to sell close to record levels, Honda knows that making a fuss about the fifth-generation CR-V would likely hurt sales. There are numerous examples of automakers trumpeting a redesign or refresh and having sales of the current generation slide as hype builds for the new vehicle.
Possibly the worst accidental offender in recent history is General Motors’ handling of the Volt. The second-generation Chevrolet Volt was unveiled at the January 2015 North American International Auto Show to much fanfare. The sales total that month was nearly half of the previous January’s tally and this slump continued all the way into May of 2015. Around that time, GM boosted incentives to help move Volts off the lot.
A lower volume, innovation-focused vehicle like the Volt is bound to take a sales hit with a much-touted, much-improved version waiting in the wings. However, if it were to happen to a high volume vehicle like the popular CR-V, it could be a big problem for the manufacturer. Honda sold 31,884 compact crossovers in the U.S. last month and summer sales hit a high-water mark for the brand’s second best performer. Honda doesn’t want to lose a single one to the 2017 model if it can help it.
The automaker managed this in a few key ways. For starters, it announced the new model close to its introduction date while creating minimal hype.
“I think it’s a very deliberate move — and probably a very smart move — on the part of Honda to maybe reduce pressure on incentive support,” Bob Navarre, former chair of Honda’s dealer advisory board, told Automotive News.
“It’s such a high-volume vehicle now that I think if you took some percentage of market and put it on hold earlier than you need to, it might have been a more costly transition.”
Second, the automaker improved the new CR-V without going overboard. Its styling almost looks like a mid-generation refresh instead of an entirely new model. It grows a little bigger and gains a stronger, more economical engine option.
Honda is also going to ensure production demands are met for the new model, reducing the usual sales dip seen during a changeover. Honda is adding the CR-V to lines at its Greensburg, Indiana plant while continuing production in East Liberty, Ohio, and Alliston, Ontario. This should keep dealer inventories stable.
The 2017 Honda CR-V should go on sale this December.
[Source: Automotive News] [Image: Honda North America]
A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.
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When buyers get their foot into the turbo the 2017 sales will outpace the 2016's easily.
Going on a few months now, you've been able to score very un-Honda-like discounts off MSRP on CR-Vs. I was offered $4k off sticker when shopping one recently. Honda dealers typically don't offer to slice four grand off the price of $25k cars. Honda has done this in a wise manner. Instead of offering big rebates to the customer and advertising the discount (potentially hurting product image and resale), they're basically giving dealers some sort of pooled incentive money that they can dole out at their discretion to make deals happen. Honda is both keeping the update low key, and using under the radar incentives to keep sales up at the end of the current car's run. Clever. The price you can therefore buy a current style CR-V at is far lower than TrueCar or Edmunds or any of the common car sites indicate. I'm half tempted to pick up a '16 CR-V at a big discount rather than wait for the new version. I'd probably be a low end trim buyer anyway, LX or SE. The new LX model isn't going to be that much improved over the current vehicle. The EX and above are a different story, since they get the 1.5T, the lane departure goodies, etc. A new gen EX AWD is probably going to list for somewhere not far south of $30k, with minimal discounts, which puts it beyond what I'm probably willing to spend. LX AWD of the current gen can be had for around $22k these days. Seems like a deal to me. Ah, decisions. What I really want is a new Element. Nobody makes anything like that as far as I can tell.