Paring down vehicle inventories and successfully launching flagship products are the big tests for Acura this year.
The new RLX sedan goes on sale in March, followed by the redesigned MDX crossover in the middle of the year. Acura dealers are working with the manufacturer on launch strategies, says Mac Churchill, who owns an Acura dealership in Fort Worth, Texas.
Staff Reporter Amy Wilson spoke with Churchill, chairman of the Acura Dealer Advisory Board, about what's coming up for Acura in 2013.
How was 2012 for Acura dealers?
Much improved. Our sales were up 26.7 percent. Everybody's net profits were up accordingly, generally across the board. Of course, this was the year without the tsunami. It was the best sales result since 2007. 2013 is going to be an outstanding year, with the new product they have coming and with the RDX being in full production all year long.
What are the major issues Acura dealers face in 2013?
First is the launch of the 2014 RLX, our new luxury sedan that will be here in March. We're pulling out all the stops on a very successful launch. We've got all kind of new strategies to do that. We're going to try to build an order bank before the car even gets here.
Are you seeing early demand from people in the showroom or folks calling and asking to be put on lists?
Yes. We have lots of customers and lots of questions. We should be getting a couple of cars for them to view in February. There's lots of interest because Acura has not had a real good flagship car, and this will be our answer. [The factory] is going to get us cars ahead of time, and we're going to be able to test drive them and demo them. People will be able to place orders ahead of time, before the production starts.
Will it come across to consumers as a true luxury car?
Absolutely. It's finally there. The valet will park it in front of the restaurants. We've been asking for several years to have a real luxury flagship sedan, and this is the answer.
How will it do against the BMW 5 series and Mercedes-Benz E class?
Those owners are real loyal. But we'll win some over, and we'll win some back.
What else is a major issue for 2013?
We've got to have a successful launch on our flagship SUV, the 2014 MDX, which is still our best-selling model ever. It's really important we have a good launch without challenges.
Do Acura and the dealers still need to work out that launch?
We're working on the strategies. First, we're going to handle the RLX launch, but we've already begun talking about MDX.
Can MDX sales increase with the redesigned model?
Yes. In the South, all-wheel drive is not as big a deal as it is up North in the snow. So we've been pushing for two-wheel drive, and they're going to come through with it. We're super excited. All the Southern states and California have been asking. We were real successful with the two-wheel-drive RDX we asked for. This will be a big deal for us.
Another challenge we have is communications from the factory to the dealer and the dealers back to the factory, so they can have proper input and we can make changes like this two-wheel-drive MDX. They seem to be listening better. They listened to us about designing the launch for the new RLX, so we think we're making progress there.
Has that been a struggle in the past?
Yeah. It's been more of a struggle, more top-down than coming from the dealers up and having an effect. But as of late they've been open-minded and have reacted quickly to some of our suggestions. We're actually getting more face time with Acura senior management. That has a lot to do with it.
What's being done to get sales moving for the ILX small sedan?
They were [too] aggressive on their sales target. That particular market segment is languishing. It's picked up recently since they put some more support on it. Early on, we were doing half the [targeted] sales. But [that's] 25 percent of that market segment, which ain't bad. It's No. 2 in the market segment.
Is it matter of readjusting expectations, or should other things be done?
They're making adjustments. We'll probably see them as early as May. They're going to up the content, improve the inside of the car. More value for the money. In the meantime, they'll have support for the car.
What are the content enhancements?
They haven't told us, but I would suspect they will add leather and power seats and things like that.
And not change the price?
Probably, yes.
How much longer will the TSX stay in the lineup?
They haven't put a timetable on it, but I think through this year anyway.
Does that vanish when the TL replacement arrives next year?
I bet so, yes.
How can Acura best juggle these product initiatives: Getting the ILX moving, keeping the RDX momentum and launching the new RLX and MDX? That's a big slate.
We're working to build a product cadence in lockstep with lots of preparation on the front end and designing our lease strategy around each of the products as they phase out or come in.
So we can transition people into new units and new models as they become available.
We're going to make sure we think out our strategy on the launches so they correspond to the cars and come in in the best manner possible. That's why we're coming with a couple of cars for each dealership to test drive for customers before the [production] cars even get here.
Do dealers see Acura as a premium or luxury brand?
We're trying to be a brand that offers value and not compete against the cigar-and-scotch crowd.
Are you conquesting buyers from other luxury brands or are they mostly moving up from mainstream brands?
Mostly mainstream brands, but we think the new RLX will conquest some of the luxury brands. MDX is currently conquesting some of those luxury brands. BMW and Lexus, for sure, and Infiniti.
What do Acura dealers think about the advertising account being put up for review?
Most of them thought it was overdue. Competition always makes you better. [Incumbent] RPA may ultimately end up with it.
But until you see what else is out there and how creative other people are, you can't be certain you're getting the best bang for your buck in advertising.
Do dealers want a new advertising vision for Acura? The Seinfeld commercial was perceived as cute, but does that get the job done?
We have great Super Bowl ads. But it's those ads that go on all year long that beat the drum to help you make sales that are so important.
One or two splashes doesn't make an advertising campaign. And a real marketing campaign embodies all the different media, whether it's billboards or radio or television. It might be special events, but you've got to bring them all together and have a focus.
We haven't done a real good job of explaining the benefits of owning an Acura.
Does Acura have anything new in the works in terms of a facility image program?
They haven't come with any kind of program. I'm sure they've thought about it, as many manufacturers are. They do have a design model if you want to upgrade your store. They have not come with any extra money to help us. No hard pressure.
How does the certified-used program work? Are there ways to improve it?
We have made recommendations. The certification process isn't the problem. We just need more advertising and promotion in that area.
They're trying to put a plan together. They've already come with some interest rate support on some of the cars, so they've helped.
Is it final? Do we have a year's deal laid out? Not that I'm aware of yet. We're working with them to get a plan into effect that can be ongoing, that we don't have to reinvent each year.
We asked for co-op money. We asked for point-of-purchase products. We asked for a portfolio. We asked for incentive money for the certified cars.
Is anything still missing from the product lineup?
We have the NSX coming. It's not a volume car. We're making plans and talking about it already. It's a year and a half away anyway. I really don't know.
Once the NSX is out, will you have a full lineup?
We'll have a very good core. We probably need to find some other niches. I would say a convertible, a coupe.
They are not in the works, although I'm sure they're thinking about it and looking at the market segments they need to try to attack.
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