Acura in America Really Needs Acura in China to Succeed, but That'll Take Time

acura in america really needs acura in china to succeed but thatll 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.

Timothy Cain is a contributing analyst at The Truth About Cars and Autofocus.ca and the founder and former editor of GoodCarBadCar.net. Follow on Twitter @timcaincars.

Comments
Join the conversation
3 of 18 comments
  • Gasser Gasser on Aug 24, 2017

    Let me see if I have this correct: US built MDX faces an almost 100% tariff going to China, but Buick Envisions waltz into our showrooms??? WTF??

  • Tennessee_Speed Tennessee_Speed on Aug 24, 2017

    In 1990 I bought a Legend. My wife liked it so much she bought one in '91. They were superior to the competition back in the late 80's and early 90's. Then the RL appeared. I bought one in 2000; not nearly as good as the Legend was in it's day; mainly the way it drove. Fast forward to 2017 - the TLX is nowhere at the level of the Legend was in it's day, relatively speaking. Honda just has to invest more funds to produce sedans that compete or exceed the competition.

    • Onyxtape Onyxtape on Aug 24, 2017

      The Legend was spendy back then - over $75k in 2017 dollars.

  • 285exp I am quite sure that it is a complete coincidence that they have announced a $7k price increase the same week that the current administration has passed legislation extending the $7k tax credit that was set to expire. Yep, not at all related.
  • Syke Is it possible to switch the pure EV drive on and off? Given the wonderful throttle response of an EV, I could see the desirability of this for a serious off-roader. Run straight ICE to get to your off-roading site, switch over the EV drive during the off-road section, then back to ICE for the road trip back home.
  • ToolGuy Historical Perspective Moment:• First-gen Bronco debuted in MY1966• OJ Simpson Bronco chase was in 1994• 1966 to 1994 = 28 years• 1994 to now = 28 yearsFeel old yet?
  • Ronnie Schreiber From where is all that electricity needed to power an EV transportation system going to come? Ironically, the only EV evangelist that I know of who even mentions the fragile nature of our electrical grid is Elon Musk. None of the politicians pushing EVs go anywhere near it, well, unless they are advocating for unreliable renewables like wind and solar.
  • FreedMike I just don’t see the market here - I think about 1.2% of Jeep drivers are going to be sold on the fuel cost savings here. And the fuel cost savings are pretty minimal, per the EPA: https://www.fueleconomy.gov/feg/PowerSearch.do?action=noform&path=1&year1=2022&year2=2022&make=Jeep&baseModel=Wrangler&srchtyp=ymm&pageno=1&rowLimit=50Annual fuel costs for this vehicle are $2200 and $2750 for the equivalent base turbo-four model. I don’t get it.
Next