American Honda’s vice president for sales, Ray Mikiciuk, won’t provide a firm forecast for sales of the 10th-generation Honda Accord. But as far as next year goes, “I don’t expect to sell fewer Accords in 2018 with this great new product,” Mikiciuk tells CNBC.
With belief in the company’s new product, Honda has invested $267 million into its Marysville, Ohio, plant where the Accord, Acura TLX, and Acura ILX are assembled. With 300 additional employees, American Honda is following the lead of Toyota’s all-new 2018 Camry.
At the Camry’s Georgetown, Kentucky, assembly plant, production of the new TNGA-based Camry required Toyota to build up its employee count to the highest level ever. That’s certainly not the way rivals are approaching America’s midsize segment. You’ll recall that General Motors cut Chevrolet Malibu production — and consequently, jobs — in Kansas City earlier this summer. Prior to the new Camry’s launch this summer, the Malibu was the freshest midsize sedan on the block, yet Malibu sales have plunged by more than a fifth in 2017.
Ohio production of the 2018 Honda Accord began yesterday, September 18th. But what do Honda’s vague sales forecasts mean in the broader American midsize segment?
More market share.
We’ve already seen it with the all-new Toyota Camry. A nameplate that owned 19 percent of America’s midsize sedan segment over the last year improved its share of the segment to 24 percent in August 2017, a remarkable level of support for a car with nine direct competitors.
Come the tail end of 2017, and it’ll be the all-new Accord’s turn — with the Camry’s help — to decimate the opposition. Through the first two-thirds of 2018, America’s midsize sedan segment has lost 17 percent of its volume, year-over-year. Let’s say the rate of decline slows, and midsize car sales at this point in 2018 have tumbled only 10 percent. But let’s assume Honda’s sales vice president Ray Mikiciuk is correct in suggesting the Accord won’t lose sales. In that case, at this point in 2018 the Accord’s share of America’s midsize market will have shot up to 20 percent from 18 percent in 2017.Yet even before the all-new 2018 Honda Accord arrives, Honda is already gaining great chunks of market share because sales of the outgoing ninth-gen Accord aren’t falling nearly as fast as the midsize segment overall. In 2015, Honda owned 15 percent of America’s midsize sedan market. That figure jumped to 16 percent in 2016 even as Honda reported 10,000 fewer accord sales. Despite a loss of 10,000 Accord sales through the first eight months of this year, American Honda’s share of the U.S. midsize segment has grown another by another two points in 2017.
Across the sector, America’s midsize sedan category has lost more than 240,000 sales in 2017, year-over-year. Domestic nameplates — Malibu, Ford Fusion, discontinued Chrysler 200 — account for 112,000 of those lost sales. Hyundai and Kia combined to lose nearly 48,000 Sonata and Optima sales compared with the first two-thirds of 2016. The Nissan Altima, also set to be replaced shortly, took a 34,000-sales hit.
Honda says the 2018 Accord will be available in five trim levels: LX, Sport, EX, EX-L, and Touring. The 2.0T is reserved for Sport, EX-L, and Touring. Accord Hybrids will be offered at Hybrid, EX, EX-L, and Touring levels. There will be no coupe. Honda has not yet released fuel economy or pricing info.