The SUV entries will complement Honda's CR-V small SUV, which is selling better since its redo last year, and the hot-selling Odyssey minivan. Production ceased last year on the aging Honda Passport, a rebadged American Isuzu Motors Rodeo.
Eric Conn, assistant VP-advertising at the automaker, said Honda brand loyalty-or the percentage of Honda owners who return to buy another-slipped to a percentage in the high 20s from roughly 48% a few years ago. "That 20% we lost went to SUVs or minivans. If we want to retain our customers, we had to go into that [SUV] segment."
He said Honda's 2002 ad budget is up from 2001, but only by a single-digit percentage. Honda had to carefully allocate its resources this year as it launched Civic's first hybrid-engine model. It's now creating campaigns for the redone Accord sedan and coupe, due this fall, and the Element.
Honda's brands spent $264 million in measured media for cars and trucks last year, according to Taylor Nelson Sofres' CMR.
Tom Elliott, exec VP of American Honda, projected sales of about 80,000 Pilots in its first 12 months with a target of 50,000 annually for Element, at least initially. Element will be priced from $16,000 to $21,000; CR-Vs sell for $19,240 to $21,940; Pilot is priced from $26,900 to $32,520.
"The CR-V was the biggest SUV we had" since Passport's departure, Mr. Conn said. The Pilot fills Honda's void in the popular midsize category.
Independent Rubin Postaer & Associates, Santa Monica, Calif., is creating four :30s for Pilot, two of which are done. Larry Postaer, exec VP-director of creative services, said the spots show family adventures in the great outdoors with a twist of humor. In one, a dad and his two sons hop into the Pilot after dirt biking. "It's very refined," narrator Richard Dreyfuss says, a cloud of dust rising from one son as his dad slaps his back. (AdAge.com QwikFIND aan57g)
La Agencia de Orci & Asociados, Los Angeles, created a :30 TV commercial and :60 radio spot in Spanish and English for Pilot. That campaign also breaks today. It carries the tag "As big as your imagination,"touting the eight-seat SUV. Mr. Conn said SUV and minivan ownership represent a higher percentage of the Hispanic population than the general market.
Jim Hall, VP at consultancy AutoPacific, predicted Pilot will do well. But he said the pricing isn't as aggressive as he expected from Honda, a latecomer to the mid-size SUV category. He said the redone CR-V small SUV is better and more competitive than its predecessor. But the Element "could be a tough sell because it doesn't promise to have very interesting [driving] performance."
The Honda brand tallied its fifth-straight U.S. record sales year in 2001. Through April, Honda sold 323,143 vehicles, a 0.7% drop from the 325,404 sold in the year-ago period. The marketer hasn't offered much in the way of incentives this year.
Globally, the Japanese automaker posted record profits and revenues in the fiscal year ended March 31, 2002, according to Automotive News. Honda Motor Co. earned a global operating profit of $4.8 billion, up 57% from the prior year, on revenue of $55.3 billion, nearly 14% higher than the year-ago figure.