Refurbished Accord Critical To Honda’s Success In The U.S. Car Market

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Honda Motors (NYSE:HMC) finally unveiled its much-awaited new Accord recently. The midsize family sedan segment is getting more competitive than ever in the U.S. with models from Nissan, General Motors, Ford Motors (NYSE:F) and Hyundai all performing well in the segment, which was once dominated by Toyota’s Camry. Honda is putting in a lot of efforts in order to get ahead of the competition and sales of Accord have boomed recently. In our analysis below, we take a look at what is driving the current success of the Accord in the U.S.

Incentives Driving Sales of Accord In 2014

Accord is very important to Honda in the U.S.. In 2013, Sales of the midsize car made up 24% of the company’s total U.S. sales volume, and year to date, the sedan has made up 26% of the total. In August, the company sold more than 51,000 Accords, an all-time monthly record for the car. The sales number has grown by a staggering 33% from the same period last year. [1] In contrast, Toyota’s Camry saw sales of ~44,0oo units in August. Accord and Camry have registered growth of 6.7% and 5.6%, respectively, through August in 2014 compared to the year-ago period. Accord’s success in the U.S. is a very important development for Honda, as the company has been facing falling sales volumes in the U.S. In the first eight months of the year, the company’s total deliveries in the country were down by 1%.

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Honda’s focus is on trying to boost retail sales to individual buyers. To this end, the company has offered up incentives on the Accord to attract buyers, much like most of its competitors in the midsize car segment have done. According to Edmunds analyst Jessica Caldwell, the recent sales surge of the Honda Accord, Ford Fusion and Nissan Altima have been driven by discounts that are making these models attractive to owners of older cars. According to Edmunds, Honda has increased its incentives on the Accord to nearly three times of the discounts that it was offering last year. [2] Nonetheless, the $2,013 incentive on Accord still comes in lower than the ~$2,300 incentives on the Altima and the Fusion.

Refurbished Accord Will Help Boost Sales Further

Honda will be able to give its sales a further boost with the launch of the refurbished 2015 Accord, which became available at stores at the end of August. The 2015 Accord will compete with the 2015 Camry that will hit stores by the end of September. To ensure that it meets the competition, Honda has rolled out the 2015 Accord sedan, coupe, plug-in and hybrid versions.

Depending on the version, the Accord is available from a starting price of $22,000, slightly lower than that of the 2015 Camry, and go up to $38,000. With a greater focus on fuel efficiency, Honda is now able to claim a mileage of 25 miles per gallon(mpg) in the city and about 35 mpg on highways. Combined with cool features such as the HomeLink Wireless Control, which can be used to operate up to three devices, like the garage doors, home security system, or lighting, and the superior Intelligent Multi-Mode Drive (i-MMD), which offers three discrete driving modes, an EV drive, a hybrid drive, and the engine drive, the car is well equipped to stay ahead of its competition. Though competition is growing, it’s clear that Honda’s doing everything in its power to make cars that keep the company a step ahead of other competitors.

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Notes:
  1. All-time Record Sales for Honda Accord Leads American Honda to Near-Record August, honda.com, September 2014 []
  2. Booming Crossover SUV Sales Trigger Car Discounts, The Pooch Times, September 2014 []