Honda’s Acura Plans Second-Half Lift From TLX Car in U.S.

Honda Motor Co. (7267)’s Acura, struggling to boost U.S. deliveries amid competition from bigger luxury brands, should see faster growth from August with the arrival of a new sport sedan, the division’s U.S. chief said.

The mid-size TLX, priced from $30,995, goes into production at Honda’s Marysville, Ohio, plant this month and will reverse a slump for Acura sedans, Mike Accavitti, Honda’s U.S. senior vice president who leads the brand, said in a phone interview yesterday. Acura’s first-half U.S. sales grew just 1.3 percent as a 32 percent drop in sedan deliveries was offset by a 31 percent gain for its MDX and RDX sport utility vehicles.

“Finally the moment is here that we’re going to unleash that TLX sedan, and we’re very confident it’s going to bring us the same kind of success we’ve experienced with the MDX and RDX,” Accavitti said. “The TLX is going to be a volume contributor,” he said, without providing a sales goal.

Honda from April 1 elevated Acura to a division within the company, giving it dedicated management, marketing and other resources. The TLX and a promotional push are priorities for the brand as sales for Bayerische Motoren Werke AG (BMW)’s BMW, Daimler AG (DAI)’s Mercedes-Benz, Toyota Motor Corp. (7203)’s Lexus and Audi AG (NSU) eclipse those of U.S.-based Acura, the first premium line by an Asian automaker in the world’s second-largest car market.

“Acura doesn’t have a big lineup, and sedans are not doing well,” said Takeshi Miyao, a Tokyo-based auto analyst at Carnorama Japan. “TLX has been positioned strategically in the volume zone so I expect adding the model will help it compete with German brands and Lexus.”

‘Bit Better’

Honda fell 1.6 percent, poised for the biggest drop since May 15, to 3,517 yen as of 1:12 p.m. in Tokyo trading, compared with a 0.7 percent decline in the Nikkei 225 Stock Average. Acura’s U.S. operations are based in Torrance, California.

Deliveries for the brand should be higher than the current pace of about 156,000 units in the U.S. this year, Accavitti said. “I think we can do a bit better than that,” he said, without elaborating.

Acura’s U.S. sales were 165,436 vehicles last year. In the first half this year, sales were 77,951 units. BMW led the U.S. luxury segment with 157,382 deliveries, followed by Mercedes at 151,624, Lexus’ 138,689 units and 84,349 deliveries for Audi. General Motors Co. (GM)’s Cadillac also led Acura, with 82,117 units sold in the U.S.

Promotion of the U.S.-built TLX begins in August and will be “the biggest marketing campaign we’ve had in Acura history,” Accavitti said, declining to provide the amount to be spent.

June sales for Acura, down 19 percent from a year earlier, were hurt by limited inventory across the brand, and that won’t ease until August, Accavitti said. At that point, along with the TLX, Acura will begin selling a hybrid, all-wheel-drive version of its RLX sedan and have better supplies of MDXs and RDXs, he said.

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

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

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