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  • William Maley
    William Maley

    A Slow Start for the 2018 Honda Accord

      A number of dealers cite the lack of good lease deals

    The new Honda Accord has been lauded by the automotive press for its design, improved ride and interior, and noticeable increases in fuel economy. In fact, the Accord has been named North American Car of the Year. But dealers are struggling to move the new Accord off lots.

    In February, sales of the Accord dropped 15.8 percent when compared to the year before. According to Automotive News, inventory levels of the Accord stood at a 104-day supply at the beginning of this month - very high by Honda's sparse count. Some dealers have been turning away shipments from the Marysville, Ohio plant. 

    "Where lease is heavy, like Florida, New York, Ohio and California, that's where we're getting hurt. When you get two cars as close as they are, it's not that much better than the Camry that people are going to pay $50, $60 [or] $80 more a month," said Rick Case, CEO of Rick Case Automotive Group.

    One of Case's dealers in Florida has more than 600 Accords in stock, about 200 more than its usual stock. They have turned away some Accords in January an February. Sources told Automotive News that dealers in the Miami area have turned down around 1,000 Accords since they have too many sitting on their lots.

    One reason is how consumers are trending towards to crossovers over midsize sedans. But dealers who spoke with Automotive News say there is another reason - the lack of attractive leasing options. The new Accord has a higher starting price than the previous-generation model which in turn raises the price of a lease. Honda's website lists a 36-month lease for the base Accord LX at $249 per month with a $3,199 down payment. Meanwhile, Toyota is offering a 36-month Camry LE lease in the Detroit area for $229 per month with a $1,999 down payment. In other regions, the Camry deal becomes even sweeter. In the Miami area, Toyota is offering a 36-month Camry LE lease for $199 per month with a $3,198 down payment.

    The various accolades and high-quality that have been key Accord attributes aren't working at the moment.

    "The quality gap has narrowed between the domestics, Honda and Toyota. When you're buying a car, you have a great story to tell a customer. When you're leasing, they say, 'Well, it has at least three years of warranty on it.' They're just renting it anyway. It is an uphill battle," said a Honda dealer in the Detroit area.

    Dave Conant, owner of Conant Auto Retail Group which has four Honda dealers in California says he understand why Honda isn't throwing money at the Accord at the moment due to big investment to get it on the road. But he wouldn't be shocked if the automaker offers some sort of incentive support, especially in terms of leases later in the year.

    "I'll be surprised if we don't see some help in April or May. They're not going to let the car sit on the lot. Without the incentive support, the payment from the car [that customers are] trading to the new one — the gap is too large. They need to do something to bring that closer, and the car will start selling and leasing well again," said Conant.

    Source: Automotive News (Subscription Required)




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    Toyota is wanting to keep everyone as far away from their golden goose as possible and Honda is going to have to accept that the investment to keep their Accord on par with the Camry comes with the cost of having to take less money upfront to recover R&D. It might be a great improvement, but most people have moved away from cars and to have 600 sitting on a lot is just crazy. Cost of doing business when you are the #1 or #2 car in a shrinking segment.

    I would not be surprised to see most automakers reduce their cars to just a couple.

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    11 hours ago, dfelt said:

    Toyota is wanting to keep everyone as far away from their golden goose as possible and Honda is going to have to accept that the investment to keep their Accord on par with the Camry comes with the cost of having to take less money upfront to recover R&D. It might be a great improvement, but most people have moved away from cars and to have 600 sitting on a lot is just crazy. Cost of doing business when you are the #1 or #2 car in a shrinking segment.

    I would not be surprised to see most automakers reduce their cars to just a couple.

    Spot on....and as the deals get even sweeter for sedans, they really need to jump on the boat.....

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    balthazar

    Posted (edited)

    A few weeks ago, after seeing a pic of the current accord posted here, I stated I hadn't seen any.
    I've kept my eyes open and I can report I do see the new accord out & about. I'm sure I had seen it earlier but here's why I think I never noticed it.

    The car simply does not have any brand image or make an impression whatsoever. It looks OK but it's totally generic. I believe a huge chunk of the sales stagnation is that it's just not making people seek out a honda because this car doesn't seem to even be a 'honda'.

     

    Edited by balthazar
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    Poor sales because of few deals on leases.  Given the mad march towards CUVs over sedans, you would think that Honda would make the Accord cheap to lease. Also, the competition is no longer the sad slouches they were 15-20 years ago.  The Chrysler 200 is finally dead.  The Malibu does NOT SUCK and neither does the Fusion.  Hyundai/KIA are adding pressure.  And there has always been the Toyota Camry since 1983.

    Somewhere along the line, Honda forgot to compete against increasingly tougher competition.  They had better figure this out sooner than later.  Otherwise, there will be even more Accords staying in Marysville OH and not at the local dealership.

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