American Honda Believes Sales of the New Honda Accord Won’t Fall, Sinks $267 Million Into Ohio Plant
American Honda’s vice president for sales, Ray Mikiciuk, won’t provide a firm forecast for sales of the 10th-generation Honda Accord. But as far as next year goes, “I don’t expect to sell fewer Accords in 2018 with this great new product,” Mikiciuk tells CNBC.
With belief in the company’s new product, Honda has invested $267 million into its Marysville, Ohio, plant where the Accord, Acura TLX, and Acura ILX are assembled. With 300 additional employees, American Honda is following the lead of Toyota’s all-new 2018 Camry.
At the Camry’s Georgetown, Kentucky, assembly plant, production of the new TNGA-based Camry required Toyota to build up its employee count to the highest level ever. That’s certainly not the way rivals are approaching America’s midsize segment. You’ll recall that General Motors cut Chevrolet Malibu production — and consequently, jobs — in Kansas City earlier this summer. Prior to the new Camry’s launch this summer, the Malibu was the freshest midsize sedan on the block, yet Malibu sales have plunged by more than a fifth in 2017.
Ohio production of the 2018 Honda Accord began yesterday, September 18th. But what do Honda’s vague sales forecasts mean in the broader American midsize segment?
More market share.
We’ve already seen it with the all-new Toyota Camry. A nameplate that owned 19 percent of America’s midsize sedan segment over the last year improved its share of the segment to 24 percent in August 2017, a remarkable level of support for a car with nine direct competitors.
Come the tail end of 2017, and it’ll be the all-new Accord’s turn — with the Camry’s help — to decimate the opposition. Through the first two-thirds of 2018, America’s midsize sedan segment has lost 17 percent of its volume, year-over-year. Let’s say the rate of decline slows, and midsize car sales at this point in 2018 have tumbled only 10 percent. But let’s assume Honda’s sales vice president Ray Mikiciuk is correct in suggesting the Accord won’t lose sales. In that case, at this point in 2018 the Accord’s share of America’s midsize market will have shot up to 20 percent from 18 percent in 2017.
Yet even before the all-new 2018 Honda Accord arrives, Honda is already gaining great chunks of market share because sales of the outgoing ninth-gen Accord aren’t falling nearly as fast as the midsize segment overall. In 2015, Honda owned 15 percent of America’s midsize sedan market. That figure jumped to 16 percent in 2016 even as Honda reported 10,000 fewer accord sales. Despite a loss of 10,000 Accord sales through the first eight months of this year, American Honda’s share of the U.S. midsize segment has grown another by another two points in 2017.
Across the sector, America’s midsize sedan category has lost more than 240,000 sales in 2017, year-over-year. Domestic nameplates — Malibu, Ford Fusion, discontinued Chrysler 200 — account for 112,000 of those lost sales. Hyundai and Kia combined to lose nearly 48,000 Sonata and Optima sales compared with the first two-thirds of 2016. The Nissan Altima, also set to be replaced shortly, took a 34,000-sales hit.
Honda says the 2018 Accord will be available in five trim levels: LX, Sport, EX, EX-L, and Touring. The 2.0T is reserved for Sport, EX-L, and Touring. Accord Hybrids will be offered at Hybrid, EX, EX-L, and Touring levels. There will be no coupe. Honda has not yet released fuel economy or pricing info.
[Image: Honda]
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 and Instagram.
Toyonda to duke it out for what’s left.
Yup battle for market share. Honda and Toyota will make gains and it will probably get ugly for the rest.
Yes, exactly. This has always been the historical pattern in market share battles in the car industry – the giants battle each other and emerged unscathed but the small players are collateral damage. Except in the old days, “small players” meant the likes of Nash and Studebaker, not Chrysler and GM.
I’m positive sinking $$$ into the plant had nothing to do with suspecting future sales might not fall.
Like all modern plants I’m sure the plant is “flexible” and they can crank up the production of some other vehicle if Accord sales fall.
The same thing happened when Ford and GM withdrew from the minivan market.
In this case, Hyundai/Kia have the most to lose, since their portfolio has no trucks, and only mid-performing SUVs and CUVs in terms of sales. VW and Mazda will get pummeled for the same reasons.
Did this guy take a look at the new Camry?
I think Accord v Camry is going to be more entertaining than it has been for years just because they two companies are taking totally different approaches to “midsize sedan.”
Especially if the new Accord ever got AWD.
I think Honda sedans are prohibited from getting AWD option because Honda fear it would seriously hurt Acura sedan sales. AWD option is offered on Acuras and never offered on Honda sedans.
Yes..N/A engines, more conventional look, less options than the competition versus lowered coupe styling with force-fed engines and more features.
I predict the Camry will take the 2018 crown on account of the late Accord rollout, but 2019 should prove interesting, especially if fleet sales are removed from the comparison.
“We don’t NOT predict a reversal of the decline in sales as focus groups say they ‘don’t dislike’ the new Accord, which is always not a negative indicator of inverse correlations in sales trends. Sorry not sorry.”
Strange time for auto enthusiasts. Sedan popularity is giving way to CUVs. Wagons are popular with a minuscule but passionate group of supporters. BMWs are more luxury than sport and the Camry and Accord are going for sport. Camry still offers a V6 and the Accord offers a stick. In 2017.
Astute observation.
I wish they had spent a few bucks giving the new Accord a lower air intake treatment that hid the AC condenser better. It looks unfinished and vulnerable to damage.
That’s the FMIC BRAH!!
OK, it’s the AC.
Honda is saving the missing horizontal trim piece across the middle of the front end for the mid model refresh for in 2021. Adding back a $30 components is easily way to boost sales! LOL!
If that piece fits in between the two body-colored bumper areas, and isn’t one continuous piece of plastic, I wonder if some enterprising aftermarket vendor might make body-colored inserts to swap?
I so want top engine spec with MT….. Right now driving a 1997 accord MT….
My local Honda dealers have been deeply discounting the outgoing 2017 models all summer long. I just leased my first Honda-a Accord LX- 35 payments of $219/month total cost, with zero dollars up front-they even paid registration and transfer fees ($330)! I would have preferred a Fusion, but I would have needed $3000 up front, and for the same monthly payment Ford allowed 10,500 miles/year vs 12k for the Honda. Steep discounts keep market share, evidently.
Wait…Honda discounts?
What is thr agreed upon price for the leased Accord?
The MSRP on the window sticker was $24130.When I set up my online Honda Financial Services, they listed the payoff amount for purchase at $20,130- $4k off list automatically! The end of lease buyout amount is just over $13k.
This is very interesting, thanks for the post.
I forgot to add- included are five free oil changes+tire rotations!