By CHESTER DAWSONHonda Motor Co. unveiled a svelter version of its mainstay compact Civic car at the Detroit auto show on Monday in an effort to prevent the auto maker's momentum from stalling out in the U.S. market. The ninth generation Civic will roll into showrooms this spring after disappointing sales last year of three recent Honda models, the CR-Z hybrid coupe, Accord Crosstour hatchback and Insight hybrid.
The latest Civic is designed to help Honda beat back challenges from an increasing array of competitors with new or refreshed models, including the General Motors's Chevrolet Cruze, Ford Focus, Hyundai Elantra and Kia Forte. That stepped up rivalry in a segment long dominated by Honda and category leader Toyoya Motor Corp., with its Corolla model, comes as newer Honda models have failed to find much traction in the U.S. market.
Company officials say they are confident the new Civic will appeal to a wide cross-section of U.S. car buyers. "The new Civic will fulfill the needs of nearly every compact buyer," said John Mendel, executive vice president of sales for American Honda Motor Co.
Yet sales last year of the CR-Z, which was launched in August, and the Accord Crossover, which was added to the Honda line-up in November 2009, both have been below the company's own forecasts. The Accord Crossover undersold same class rival the Toyota Venza by nearly 2-to-1 last year and the Honda Insight trailed even farther behind Toyota's Prius. Meanwhile, the new CR-Z has not succeeded in establishing a niche so far.
"A lot of people have suggested that Honda is coasting," said Aaron Bragman, a senior analyst with IHS Automotive. "Recently, they haven't been the successful innovator they were once known for being ."
Honda said the fuel economy of the latest Civic would be 40 miles per gallon, a level now standard for compact cars, but declined to provide details on the engine size, weight, interior features or suggested price.
However, company officials promised the new Civic would be smaller, lighter, cheaper and more fuel efficient than the current generation of their bread-and-butter model. In an effort to achieve those ambitious benchmarks, Honda at one point suspended development of the car which resulted in a delay of nearly a year from when the Civic had been expected to make its debut.
"The [economic] environment changed so we needed to make changes that better reflected a new reality," said Toshiyuki Okumoto, Honda's chief designer for the new Civic. "The overall scale was reduced, but we didn't change our newer styling concepts."
As Honda's second-best-selling car in the U.S. after the Accord and the fourth-best-selling car overall in 2010, the Civic franchise is one of the most important for Honda, which depends on the North American market for more of its overall sales and profits than any other Japanese auto maker.
Honda faces a difficult challenge in its need to bridge the expectations of older, existing Civic owners who it wants to keep loyal to the brand with the competitive need to offer a fresh enough product to attract younger, newer buyers. Even as Hyundai and several American brands picked up market share in the U.S. last year, Honda saw its share drop to 10.6%, down from 11% in 2009.
In addition to the standard model, Honda also will debut a new hybrid variant that will use for the first time a lithium-ion battery pack. What's more, the company plans to begin selling a natural gas-powered Civic across the country, expanding from current sales in just four states.
Source;
http://online.wsj.com/article/SB10001424052748703779704576074522250122938.html?mod=googlenews_wsj
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