What does Acura say about returning to full production?
It’s a fluid situation. Some suppliers pulled out at the last minute, which affected production and ground units. RDX is currently still in short supply. Not built well enough to meet demand. Based on quotas, RDX expects he could improve in February or March, but that, too, will depend on suppliers meeting their commitments. We’ll see if that happens.
How do Acura dealers deal with inventory constraints?
With so many bullets for our guns each month, we tried to maximize all our deals throughout the year. We have reestablished the integrity of the MSRP, which has always been below it in the past. It has helped us a lot throughout the year.
You have to go back to basics. That means we focus on used vehicles and rotating inventory, as well as stationary work.
Has Acura helped dealers with programs and tools to help them navigate this low inventory period?
New products can help. There was a 2022 MDX, a new Integra, and a changed TLX for 2021. Like all manufacturers, they were pre-selling into the pipeline, so there was little incentive. Acura also helped customers who have been waiting for their cars for up to three months in some cases by offering a price guarantee that maintains the original selling price.
What can dealers expect in terms of inventory and days of inventory in 2023?
There is a lot of talk about dealers maintaining less inventory. I think Acura itself wants to carry commodities lower on the ground. The whole thing shifted due to lack. Manufacturers and distributors can get better results with a little less inventory days than before.
How are Acura dealers performing in terms of profitability? How sustainable are current vehicle margins and profitability levels as inventory levels improve?
We’re already seeing some dealers discount vehicles because they have more inventory now. 2022 wasn’t a record year, but it was close to a record for most dealers. Some of the rate hikes will be offset by subsidized rates from manufacturers, and with a lot of pending demand, it’s hard to tell where it will settle in the next 3-6 months.
Acura is waiting for its first EV, the ZDX, to hit the market in late 2024. How are dealers preparing for its arrival?
Acura has published requirements for different dealers in different parts of the country. There are three different levels of charging stations required by dealers. Local dealers that don’t sell many electric vehicles have the lowest requirements, and dealers in locations such as California and New York have the highest requirements.
Dealers need to get the ball rolling now as far as evaluating the amount of power being supplied to their stores. If that’s good enough, contact your electrician, electrical contractor, and hardware provider. To allocate ZDX, the equipment, special tools, and chargers should all be installed by next fall.
Do dealers feel that Acura’s electrification has been slow to market, especially in the luxury space, compared to brands that have already brought EVs to market?
I’ve heard it on both sides. Some dealers say it’s too slow, some say it’s too fast. I personally think it’s a good time. A partnership with General Motors is necessary because, like all luxury goods makers, it is losing market share to Tesla. This is now important for all manufacturers.
Honda is developing ways to customize the vehicle ownership experience through over-the-air updates and other enhancements that can be added after initial vehicle purchase. What is Acura’s position on subscription services or features that can be enabled after initial purchase?
We are having early discussions about it. We have adopted NADA’s franchise system in which dealers participate in the subscription service. Most of the time we sell it and service the vehicle with those upgrades.
Acura is still developing an online shopping experience for its customers that involves contact with dealers. How are dealers responding to this concept?
I’m on the Innovation Board, so I know what they’re thinking and where they’re headed.
I agree with Acura that we need to meet customers where they are, whether they’re sitting on the couch at home or in the store. I think all automakers are moving in this direction. Because it’s more available online and gives customers a little more control over their sales. I personally think it’s the way to go.
What are Acura’s plans to boost leasing in 2023 after leasing volumes have declined across the industry? How are recent leasing patterns impacting Acura dealers?
Especially in the summer and early autumn, there were no vehicles that customers could actually use. Over the next few months, we’ll see manufacturer incentives make leasing more attractive as inventory builds.
Both Honda and Acura do a lot to promote used car sales, including making 10-year-old cars part of their certified pre-owned program. How do dealers feel about the new Acura Precision Used program and is it working?
I believe so. I know there’s a lot of excitement about that because there are a lot of older cars right now because of the lack of new cars to sell to customers. And I think you are. And it’s certainly a good earning or profit opportunity for Acura dealers, selling parts and financing vehicles that traditionally Acura has been less involved with.
This time last year, dealers were eager to launch the Integra. Has the customer response met expectations and what effect has it had on the entry level of the Acura lineup and are dealers excited about his Integra Type S?
It definitely met and exceeded expectations. There is a lot of excitement about the Integra and a lot of floor traffic. The car is a winner overall. The upcoming Type S created even more excitement. Limited production, but more powerful. But it’s like the halo of the Integra brand. It was a good idea to revive the Integra name. This is Acura’s legacy, so it was very important to bring back that Integra name.
Are dealers still wanting a subcompact crossover that fits under the RDX? Like the new Honda HR-V that just launched?
Yes, definitely. You can see that the market has changed. I think he’s 80% of the people who buy SUVs now, and he’s only 20% of sedans. The Acura lineup has two sedans and two SUVs, so we need to find a good balance between them. No doubt, the Dealer Advisory Board and all dealers want Acura for his smaller SUV in the very near future.
Is there anything else I’m missing?
Between now and 2030, Acura will have other electric vehicles using solid-state battery technology under development. Therefore, we plan to have more products. At some point in the late 2020s, we will have the full lineup of internal combustion engine vehicles as we have today, and we will also introduce battery electric vehicles. In the next two years, towards the end of the decade, he plans to sell various products for this transitional period.