Honda Revamps Civic Again to Sustain U.S. Compact Car Leadership

Honda Motor Co. (7267), headed for record U.S. sales and seeking to maintain them in 2014, is modifying its top-selling Civic small car just a year after revamping it to address initial shortcomings.

The 2014 Civic gets a continuously variable transmission that boosts horsepower and fuel efficiency to 33 miles per gallon in combined city and highway driving. Interior changes include a bigger touch-sensitive navigation screen that responds like a smartphone as well as a camera, called LaneWatch, that’s integrated into the right passenger-side mirror to show objects and vehicles in the car’s blind spot, Honda said.

“For the third straight year we’re bringing to market an even better Civic,” Mike Accavitti, Honda’s senior vice president for U.S. auto operations, said today at the Los Angeles Auto Show. The successive changes for Civic “reflects our determination to create something new and then immediately set about to make it better.”

Honda, Japan’s third-largest automaker, stumbled with the Civic in 2011 when it was redesigned as a 2012 model. Consumer Reports magazine, typically approving of many Honda and Acura models, gave the Civic a scathing review that cited low-quality interior materials and ride and shortcomings in handling.

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Changes to the Civic by the Tokyo-based company addressed several of those issues last year. The latest emphasize Honda’s desire to stay ahead of competitors including Toyota Motor Corp. (7203)’s new Corolla and Hyundai Motor Co. (005380)’s Elantra, said Jessica Caldwell, an analyst for Edmunds.com in Santa Monica, California.

“They owned that space for a long time, and it looks like they are going back to their market-leading position,” Caldwell said in an interview at the Los Angeles show. “Corolla is probably part of the reason for the changes, but Honda knows it stumbled and wants to move beyond that.”

Civic is the best-selling small car in the U.S. this year, posting a 10 percent increase through October to 280,889 vehicles. Toyota’s Corolla, revamped this year, follows at 257,184.

Honda’s American depositary receipts rose 0.5 percent to $41.19 at the close in New York. Honda’s U.S. sales unit is based in Torrance, California.

To contact the reporter on this story: Alan Ohnsman in Los Angeles at aohnsman@bloomberg.net

To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net

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