American Honda splits marketing & sales by brand

American Honda splits marketing & sales by brand

Steve’s breakdown: No word on pending advertising changes but I have to say, the Acura ads Jerry Seinfeld has on his web-based show, Comedians in Cars Getting Coffee, is a good sign that more change is on the way.

LOS ANGELES, CA: American Honda has reassigned marketing boss Mike Accavitti to lead Acura, part of a restructuring of the automaker’s North American sales and marketing operation that will create separate divisions for the Honda and Acura brands.

Accavitti, currently in charge of marketing and product planning as senior vice president of automobile operations at American Honda, will add the newly created role of general manager of Acura Division. In that role, he will oversee all sales, marketing and parts and service operations for Acura in North America, while ceding product-planning duties and oversight of national marketing for the Honda brand.

Meanwhile, Acura sales boss Jeff Conrad will be promoted to senior vice president at American Honda and will take over all sales and marketing efforts for the Honda brand as general manager of the Honda Division.

The Honda and Acura divisions will be housed under a single operation, to be called American Honda Auto Division, led by current American Honda sales boss John Mendel. Conrad and Accavitti will report to Mendel.

The changes take effect April 1, the start of Honda’s next fiscal year. They will align Honda-Acura more closely with the structure used by Toyota-Lexus, Nissan-Infiniti and Volkswagen-Audi.

“This is going to group major activities for the Honda and Acura brands under dedicated brand leaders, allowing us to respond to the marketplace, focus on the customer and really do so with greater speed and efficiency,” Mendel said in a conference call today with reporters.

Previously, American Honda separated key operations by function, rather than by brand. For example, Accavitti oversees product planning and national marketing in his current role for Honda and Acura, while regional marketing initiatives were handled by American Honda’s sales division, led by Mendel.

Seeking direction for Acura

The reorganization coincides with a broader effort under way at American Honda to build the Acura brand into a stronger player in the luxury auto market. The marque has been criticized as traveling a “wandering road,” lacking a clear definition of what distinguishes it from German, Japanese and domestic competitors.

Acura has found success with its compact RDX and mid-sized MDX luxury crossovers, which are among the top sellers in their segments. But its cluttered lineup of front-wheel-drive sedans — ILX, TSX, TL and RLX — has foundered, failing to carve out significant market share. Acura car sales fell 10 percent last year, blunting its 21 percent surge in crossover sales and limiting the brand to a 6 percent gain overall.

A key to reviving its flagging sedan sales is the new TLX, which will replace the aging TL this spring. The TSX will leave the lineup.

During the call, Accavitti said the automaker wants Acura to stand on equal footing with its luxury rivals rather than being an entry- or midluxury brand. Acura will focus on ride and handling, leverage its Super-Handling All Wheel Drive technology and prioritize design, describing the direction as “luxury done the Acura way.”

“We see Acura as being every bit of a luxury brand as the Germans or the other Japanese or the domestics, to be honest,” Accavitti said. “We may have lost focus somewhere along the way from a product perspective, but that is strengthening. We have commitment from the very highest levels of Honda Motor Co. to give this brand what it needs to be more successful.”

Dedicated resources

The sales and marketing team overseen by Accavitti at Acura will be complemented by the recently created Acura Business Planning Office within Honda North America, the automaker’s r&d operation here. That group, led by Honda North America Executive Vice President Erik Berkman, will chart the product and strategic direction for Acura globally. Berkman, who was recently promoted from president of Honda r&d Americas, will oversee a 10-member team representing r&d, manufacturing, purchasing and other functions and will report directly to Honda Motor Co.

That team could lead to more resources being devoted to Acura, as Mendel said that Berkman is involved in discussions about potentially assigning Acura its own vehicle development budget.

“When you have someone like Erik Berkman fighting the fight daily for greater allocation of funds, you’ve got a pretty strong case,” Mendel said. “We’re looking at how that breaks out, but that is one of the potential benefits from this going forward.”

During the call, Mendel acknowledged the “on again, off again” criticisms of the Acura brand, and said these new moves reflect a recognition that Acura needs greater focus and resources to achieve its potential.

“There’s a greater recognition that we need dedicated resources and a dedicated organization to pull that through and not get ‘averaged out’ when you compare it to the Honda brand,” Mendel said. “There’s a lot of recognition that Acura should be and can be a much stronger brand than it is today, and that’s what I think you’re seeing us do.”

Conrad’s promotion makes him the automaker’s first executive to have oversight of both sales and marketing for the Honda brand in the United States.

Conrad is entering his 32nd year with American Honda after spending the last five in charge of Acura sales. He takes over the Honda Division as Honda prepares to launch the redesigned Fit subcompact this spring and a new Fit-based small crossover later this year, two models that Mendel described as being “critical in capturing our next generation of Honda customers.”


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