Honda Accord sales in Canada pay the price for marketing misstep
The 2018 Accord Sport. Photo credit: Honda
Instead of a massive advertising campaign extolling the virtues of the redesigned 2018 Accord sedan, Honda Canada said it leaned on positive reviews from the press and word-of-mouth praise from owners.
In hindsight, it leaned too heavily.
Sales of the redesigned model through the first eight months of the year are down 12.4 percent compared to sales of the previous model for the same period in 2017.
Jean Marc Leclerc, senior vice-president of sales and marketing at Honda Canada, said the company held back on a massive advertising blitz for the new model because it was assumed word-of-mouth and media praise would boost sales more than they did.
Honda Canada sold 8,973 Accords in Canada through August, down from 10,243 cars — the previous-generation model — a year earlier. The Accord was faring worse than the Canadian car market as a whole. It also lost ground to its top competitor, the Toyota Camry, which saw sales rise 12.5 percent in that timespan to 9,973 units.
“We haven’t put, perhaps, the advertising power behind the vehicle at launch like we normally do because we thought it would stand on its own with all the positive press it was getting,” Leclerc told Automotive News Canada. “It hasn’t to the extent that we expected. It’s still doing well, but we were expecting things to be much better with the Accord.”
Accord’s U.S. sales haven’t fared any better, falling 11 percent in August to 26,725 units and 14 percent to 189,942 units for the year to date.
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REDESIGN RECEIVES HIGH PRAISE
Honda Canada spokesman Alen Sadeh said the company has retooled its Accord marketing over the summer to focus on the car’s features, as opposed to the awards it won. Photo credit: Honda
Much of the automotive press lauded the redesigned Accord for its overhauled interior, new turbocharged engine and other features. The sedan received numerous accolades, including 2018 North American Car of the Year at the Detroit auto show in January.
Leclerc said Honda has made “adjustments” to its Accord marketing strategy to avoid leaning too heavily on awards and word-of-mouth from satisfied Accord drivers. He said the automaker would not slap higher incentives onto the Accord because the sedan is “very competitive” in pricing. The Accord starts at $28,372, including shipping fees.
“That’s not the gap. The gap is really the traffic generated to our showrooms, and that’s a direct relation with the media wave we’ve put behind the vehicle, which has been too light,” Leclerc said. “It’s more of an awareness issue than anything.”
Jason Willis, sales manager at Kingston Honda in Kingston, Ont., said the dealership’s biggest issue when selling the Accord is a relative lack of availability. As a result, more time is spent marketing the Civic compact car, though he said the Accord redesigned features are an easy selling point.
“The safety features are the most important thing,” Willis said. “It’s standard features like remote start. Those are, at least in Canada, extremely important.”
Honda Canada spokesman Alen Sadeh said the company has retooled its Accord marketing over the summer to focus on the car’s features, as opposed to the awards it won. He said results of the campaign should already be felt.
CAR SALES CRUCIAL
The success of the Accord, as well as the Civic compact car, is crucial for the automaker, which relies more on cars than most automakers in an era dominated by utility vehicles and pickups.
Through August, about 48.5 percent of the automaker’s Canadian sales, including the Acura luxury brand, were cars. By contrast, 30 percent of the industry’s overall sales came from car models in the same time period.
“We’re still very much a passenger-car-based manufacturer,” Leclerc said. “So the reality for us is that we have to do well. We have to dominate the market segments that we’re in to make sure we continue to grow and hit our sales objectives. That’s because our capacity on trucks today, though we’re working on increasing that moving forward, is not there today.”
Many major automakers in North America are diverting funds from the manufacturing and sale of cars to focus on light trucks, which remain in high demand and are typically more profitable. The most extreme example is Ford, which will eventually end the sale of all of its cars in Canada, except the Mustang.
Leclerc said Ford’s exit from the sedan segment and other automakers de-emphasizing car sales gives Honda an opportunity to win more conquest buyers and to grow its market share.
“We see it as an advantage for us in some ways. The idea of increasing our market share is not that far-fetched because we see a lot of players in that segment slowing down and shifting their focus and incentive money on other models,” he said.