Honda has made a quick U-turn.
Just 19 months after its Civic compact hit showrooms and was slammed by critics, the company has revamped the car, giving it a sportier look and upgrading the interior.
It's an unusual and costly do-over. But Honda — among the auto industry's most highly-regarded brands — was worried the car's flaws would hurt sales and market share, analysts say.
The 2013 version goes on sale Thursday, and Honda has given it a sportier profile, replaced its chintzy dashboard and made the ride quieter. The revamp comes to market in about half the time it normally takes, and shows just how concerned Honda is about falling behind rivals.
"The new consumer coming to the marketplace looking for a compact car doesn't think the Civic is a slam-dunk anymore," says Jesse Toprak, vice president of market intelligence for the TrueCar.com auto pricing website.
The company misjudged the small-car market when it rolled out the Civic in April of last year, analysts say. Small-car buyers used to tolerate cheap materials, noisy interiors, and boxy styling just to get high gas mileage. But they now expect their gas-sippers to have a quiet ride, crisp handling and plush seating. The 2012 Civic lacked those refinements.
It was so noisy, for example, that "I kept trying to put the windows up," recalls IHS Automotive analyst Rebecca Lindland, who says that competition caught Honda off-guard.
To be sure, criticism of the 2012 Civic hasn't dented demand. Sales of the car have risen to 255,000 through October, up 39 percent from last year. The car has passed the aging Toyota Corolla and the Chevrolet Cruze to become the nation's top-selling compact.
But the increase came mainly because Civics were in short supply last year following an earthquake in Japan. Loyal customers delayed purchases until the Civic returned, Toprak said. The Civic also is selling well because of discounts, he says. Dealers are knocking about $2,500 off the sticker price to clear out 2012 models. Civic discounts usually run about $500.
Without changes to the car, Honda probably would keep longtime customers, but it wouldn't attract new ones. "They will eventually start bleeding market share," Toprak says.
When Honda began to develop the 2012 Civic years earlier, competitors still were putting out blasé compacts aimed at budget-conscious buyers. But as gas prices rose, consumers shifted to smaller vehicles. At the same time, companies like Hyundai rolled out sleek, quiet compacts with amenities once reserved for the luxury class.
Shortly after the 2012 Civic went on sale, in the spring of 2011, the influential magazine Consumer Reports refused to give it a coveted "Recommended Buy." The magazine's chief auto tester said that the car was a step backward, and it appeared Honda tried to save money by using cheaper parts.
Company executives get prickly when asked if criticism was the reason they moved so fast to update the Civic. They'll say only that they wanted to keep the car ahead of the competition.
"We're not reacting to negative criticisms," says Art St. Cyr, Honda's chief product planner in the U.S. He says that Honda started revamping the Civic even before the 2012 model came out. "We weren't embarrassed. We weren't trying to make excuses for what we were doing." Yet Honda did something startling with the 2013 model. Instead of making a few cosmetic changes that normally come in the middle of a car's life, the company did an overhaul. It added insulation to cut engine noise, put in thicker glass to reduce wind, and made the brakes larger to stop the car faster. The seat material was upgraded, and Honda added a softer dashboard with two colors. Outside, the car got it a more aerodynamic look with a new hood, trunk lid and lights.
The improvements are so vast that Honda must have started working on them even before the 2012 went on sale, Lindland says. That's before the criticism came from Consumer Reports and others.
Lindland, who drove the 2013 Civic in advance of its Thursday debut at the Los Angeles Auto Show, says it's far better than the 2012. "I was really impressed with how quiet it was," she says. "It's just a more refined and more elegant small car." Toprak says the new Civic looks like an expensive luxury car, especially when compared with its predecessor.
The revamp is costing about $500 per car, Honda estimates. Toprak says the spending was necessary to attract new buyers. Many people who would have bought larger cars are now looking at compacts because they're in fashion, he says.
Compact car sales now account for 14.6 percent of the U.S. market, up 2.2 percentage points from just five years ago, according to Ward's AutoInfoBank.
Honda will get part of the revamping cost back by raising the base price of the Civic LX by $160 to $18,965 with an automatic transmission. But the company eliminated the stripped-down DX version, which started at just over $17,000 with automatic.
The quick do-over puts the Civic back among the top cars in its segment, says Lindland. But it doesn't mean that all automakers will upgrade their cars every 19 months.
"It's expensive to do these," she says. "I wouldn't say this is a trend — yet."
Honda has made a quick U-turn.
Furniture store chain celebrates 60 years
Gerard Winkle was looking for a job in 1972. At the same time, John VanDrie was looking for a salesperson for his McBain furniture store.Continued ...
Chrysler recalls Jeeps
Chrysler abruptly agreed to recall 2.7 million older model Jeeps Tuesday, reversing a defiant stance and avoiding a possible public relations nightmare over fuel tanks that can rupture and cause fires in rear-end collisions.Continued ...
Starbucks posts calorie counts
Starbucks has a new way to wake up its customers: showing the calories in its drinks.Continued ...
EU, U.S. agree to start free trade talks
The European Union and the United States will open negotiations next month on a long-sought deal to create free trade between the world’s two mightiest economic regions — an effort that could create millions of jobs but that could also take years to transform from dream to reality.Continued ...
Food companies work to make products look natural
Here’s the latest goal for food makers: Perfect the art of imperfection.Continued ...
Car show will offer tour of grave sites
Back to the Bricks has been focusing on immortalizing some of the big names of the auto industry in bronze, but this year they’re looking to take car lovers to the final resting places of some of those people.Continued ...
- Sunday, June 16, 2013
Wineries find efficiencies
A dwindling labor pool and challenging packaging costs are prompting several northern Michigan winemakers to utilize innovative technologies in their vineyards.Continued ...
Doug Luciani: Our youth can come home now
Riding on a school bus doesn’t exactly conjure up fond memories of days gone by. But this ride was different.Continued ...
Business in Brief: 06/16/2013
Health care reform; Biz after hours; NCMC program.Continued ...
Jason Tank: Economics a dizzying display of acronyms
In one corner, the Federal Reserve is busy stacking up dollar bills on top of each other. In the other, the beleaguered American economy is putting up one mediocre data point after another.Continued ...
Business Memoranda: 06/16/2013
Traverse City-based EverywhereUGo has expanded, with board locations in the Van Andel Arena in Grand Rapids and the Great American Ball Park (home of the Cincinnati Reds) in Cincinnati, Ohio.Continued ...
- Saturday, June 15, 2013
Ag Forum: Tent caterpillars aren't hanging around
Generally speaking, people don’t become inquisitive about a lack of caterpillars attacking their trees, so I’m not surprised that no one has asked me where the tent caterpillars are this year.Continued ...
Futures File: Corn grinds lower despite poor conditions
America’s farmers likely planted a record corn crop despite poor weather conditions earlier this spring that delayed planting across much of the Midwest, according to USDA estimates.Continued ...
Rural U.S. losing population
Rural America is losing population for the first time ever, largely because of waning interest among baby boomers in moving to far-flung locations for retirement and recreation, according to new census estimates.Continued ...
- Friday, June 14, 2013
Horizon Books co-owner wins Lyle DeYoung award
Amy Reynolds always believed in downtown Traverse City’s retail corridor, even when the trend was for business owners to race off and set up shop at the nearest mall.Continued ...
Building Permits: 06/14/2013
Building permits issued in Grand Traverse County:Continued ...
The Record: 06/14/2013
Assumed names filed in Grand Traverse County:Continued ...
Grocers allege potato price fixing
A battle between grocers and potato growers has been silently hitting shoppers’ pocketbooks, according to a U.S. wholesaler accusing America’s spud farmers of driving up prices while spying on farmers with satellites and aircraft fly-overs to enforce strict limits on how many tubers they can grow.Continued ...
- Thursday, June 13, 2013
National magazine recognizes TC for boating opportunities
Robert Brown sees only one drawback to being a boating enthusiast in Traverse City. Winter.Continued ...
Post to invest $30M in Battle Creek plant
Cereal maker Post Foods says it plans to invest $30 million in a West Michigan facility, creating 92 jobs.Continued ...
Wet spring means reduced corn crop estimate
Corn farmers are feeling the impact of a cool, wet spring but are still expected to bring in a record crop this year.Continued ...
AAA study: Voice-operated dashboard tech still risky
Dashboard technology that lets drivers text and email with voice commands — marketed as a safer alternative — actually is more distracting than simply talking on a cellphone, a new AAA study found.Continued ...
- Wednesday, June 12, 2013
Rotary gives $241K in grants
A $65,000 grant awarded to Centre Ice for much-needed facilities’ upgrades is among $241,000 doled out this week by Rotary Charities of Traverse City.Continued ...
Farm Bill debate moves to contentious House
The last time Congress passed a farm bill, Democrats had control of the House and the food stamp program was about half the size it is today.Continued ...
- Tuesday, June 11, 2013
Mancelona upgrades water lines
Mancelona is upgrading its water lines this summer in a project described as a painful but necessary step to position the community for long-term job growth.Continued ...
- Furniture store chain celebrates 60 years