Acura in America Really Needs Acura in China to Succeed, but That'll Take Time
The long-established U.S. auto industry is essentially impossible to turn on its head. An automaker can’t simply show up with a new brand or a new philosophy or new design tactics and instantly upset the apple cart.
Just as you can’t teach an old dog new tricks, it’s difficult to teach an old automobile market to adopt new buying habits. Market share swings are incremental. Progress is slow. At Acura, for example, facelifts of the TLX and RLX sedans and improved availability of the MDX (after moving some production to Ohio) will likely not combine to increase the brand’s market share by even one-tenth of one percent.
Given the difficulties faced by Acura in America — sales have fallen by more than a quarter since 2005 — Honda’s premium brand is turning its gaze to a larger, fresher, less established market. A market where buying habits are not cemented, where market share is still up for grabs, where market-specific vehicles are the norm.
And if Acura can soon succeed in China, where the brand has high hopes for the near-term, then Acura stands a much better chance of succeeding in America.
Acura is such a U.S.-centric auto brand that China, with fewer than 10,000 sales in 2016, was the brand’s third-largest market. (Canadians acquired 20,227 Acuras in 2016.) If Acura China can punch in its own weight class, Honda Motor Company will have far more justification to invest in a brand which produced only 184,000 North American sales in 2016.
The first order of business for Acura in China was a China-specific model, the Honda HR-V-based CDX, which Automotive News reports is still not a North America-bound vehicle. Produced in China for China alone, the CDX accounted for more than three-quarters of Acura’s limited Chinese volume in 2016. The CDX is largely responsible for doubling the brand’s volume in that country over the span of just one year.
But due to high tariffs, Acura’s presence in other segments is limited by vehicles imported from the United States: RDX, MDX, and TLX, plus the niche market NSX. The MDX, for example, is roughly twice as costly in China as it is in the U.S., Automotive News reports. Due to these limitations, Acura plans more China-specific content: a long-wheelbase TLX and a hybrid CDX.
More importantly, from the 958 copies of the RDX sold in China in 2016, the brand hopes to be selling 20,000 RDXs per year by 2019 thanks to local RDX production that begins in 2018. Acura’s U.S. dealers will be pleased to see fewer RDXs leaving U.S. shores, as well. Heading into August, Acura had a modest 41-day supply of RDXs in America.
Dealers matter in China, too. Acura’s dealer count will nearly double from 50 in the first-half of 2017 to 90 by the end of the year.
If Acura gets its Chinese dealers right, nails down the sort of China-targeted vehicles customers demand, and sources enough local production, Acura will still need to craft a premium image Chinese luxury car buyers perceive to be genuine.
That hasn’t proven to be such a straightforward task on this side of the Pacific.
More by Timothy Cain
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