Honda Motor Co. will begin selling a revamped lineup of Civic cars this week, the ninth generation of the compacts since 1973, to beat back competition from Hyundai Motor Co. (005380)
The 2012 lineup, including new versions of the sedan and coupe, sport-oriented SI models and hybrid and natural-gas vehicles, was shown today at the New York International Auto Show and is priced from $15,805 for a manual-transmission Civic DX to $26,750 for a Civic Hybrid with leather seats, navigation system and satellite radio, Honda said. The range is the broadest in the compact segment, the Tokyo-based carmaker said.
“That small-car segment, and Civic in particular, appeals to such a broad demographic,” John Mendel, Honda’s U.S. sales chief, said in an interview earlier this month. “You really have to sub-segmentize within that space. That’s what we’ve done, designing each of those models to go after a different group.”
Rising gasoline prices and new models from Hyundai, Ford Motor Co., General Motors Co. and Kia Motors Corp. helped lift U.S. compact and subcompact auto sales 24 percent in the first three months of this year, compared with overall industry growth of 20 percent. The Civic, which has competed for decades in the U.S. with Toyota Motor Corp. (7203)’s Corolla, also has to contend with Hyundai’s revamped Elantra, Ford’s new Fusion and Volkswagen AG’s Jetta.
“The small-car market has never been this competitive,” said Rebecca Lindland, an analyst at IHS Automotive, a research company based in Lexington, Massachusetts. “Historically, if you were looking at small cars, Civic and Corolla, they were no- brainers. That’s just not the case anymore.”
U.S. regular-grade gasoline cost $3.835 a gallon on April 18, up 34 percent from a year earlier, according to AAA’s Daily Fuel Gauge website.
While costlier gasoline typically benefits demand for fuel- efficient models such as the Civic, Honda has been forced to reduce production of all North American-built models since late March, after Japan’s March 11 earthquake and tsunami disrupted supplies of some components.
“We’ve been building the new car for a while, so we have models to sell from April 20,” Mendel said. “There are some limits on production, and we’ll have to deal with that for a little while,” he said without elaborating.
Honda has reduced daily production at all North American plants, including the two factories in the U.S. and Canada that make the Civic, until at least May 6.
“The slowdowns couldn’t come at a worse time,” IHS’s Lindland said. “For some people this is going to be an opportunity to look at some other products they might not have otherwise.”
Honda aims to sell at least 260,000 Civics a year in the U.S., the same level as in 2010. Civic sales through March rose 21 percent to 64,968, compared with a 20 percent increase for Toyota’s Corolla to 76,675, a figure that includes the Matrix small wagon. Elantra sales jumped 72 percent to 41,203.
Honda boosted highway fuel economy for the standard 1.8- liter engine Civic sedan and coupe models by 5 miles per gallon to 39 mpg, and to 32 mpg in overall city/highway driving from 29 mpg in the previous version. The new Civic Hybrid, using a lithium-ion battery for the first time, averages 44 mpg overall, up from 41 mpg.
By comparison, Hyundai’s 2011 Elantra averages 33 mpg overall, with a 40 mpg highway rating. For customers seeking a more fuel-efficient Civic, Honda has added the HF grade, a version optimized to get 41 mpg in highway driving overall, priced at $19,455.
The base-model Elantra sedan costs $14,800, rising to $22,700 for a version with leather, navigation system and other options, according to the company’s website. Hyundai doesn’t offer an Elantra coupe, or hybrid or natural-gas versions, in the U.S.
The new Civic’s exterior styling advances what Honda calls the current model’s “one-motion” look, retaining a basic similarity to the previous model.
“We kept it for a reason: because people love it,” Mendel said. “The appeal of the vehicle, even today in its sixth year, is well above average in the compact segment.”
While Hyundai is growing fast in the U.S., Honda retains an edge among U.S. car buyers, who still show a preference for the Tokyo-based company’s models, said Alexander Edwards, president of Strategic Vision, a consumer research company in San Diego.
Among U.S. shoppers in the market for a new car, 45 percent say they will definitely consider a Honda model, while only 19 percent say the same for a Hyundai product, according to estimates by Strategic Vision, which surveys about 300,000 people annually.
“Elantra is currently taking sales from just about everybody,” Edwards said. “All things generally being equal, most buyers in the U.S. still say they’d buy a Honda-brand product over a Hyundai.”
Honda’s U.S. sales unit is based in Torrance, California.
To contact the editor responsible for this story: Kae Inoue at firstname.lastname@example.org