Honda awash in new models but has to stretch dollars

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American Honda Motor Co. is perfecting the art of juggling, with a bevy of major introductions coming this year but without appreciably more ad money to brag about it.

When American Honda's new fiscal year kicks in today, ad budgets are expected to be flat from last year, so the carmaker will have to make the same amount of dollars go farther to accommodate all the new products from its Honda Division. The traditionally lean-running American Honda will rely on the momentum it has gained from several years of record sales.

American Honda has reported five straight years of record sales. The Honda Division alone has posted eight record years, with 2001's total of 1.037 million units up 2% from 2000. "This is our eighth straight record year, some years in a down market. It's not new to us, but in a down market, people are still buying," says Art Garner, Honda Division communications manager. At the pricier Acura Division, 2001 sales jumped nearly 20%, topping 170,000 units, and the luxury carmaker predicts as good or better a year in 2002. Taylor Nelson Sofres' CMR says American Honda's ad spending, which includes Honda and Acura, rose 3% to $668.2 million in 2001.

The Honda Division will launch five new models this year-a full-size Pilot sport-utility vehicle, to be unveiled this month as a full production model at the New York Auto Show; the sporty, three-door Civic Si hatchback aimed at 35-and-under males; a 54-65 mpg Civic Hybrid that takes mainstream the technology from the Insight, the first time a popular model has gotten a battery/gas-power option; the youth-inspired 2003 Model X crossover; and a fully freshened Accord, due in early fall with its first significant overhaul in five years.

Launching five products in such a short period puts strain on any organization. The saving grace is that the debuts will be staggered through the year, so Honda can rotate marketing support as products roll out.

"With the budget I have, I have to use it to maximize our exposure and keep an eye on the market. There are more competitive entries each year," says Eric Conn, American Honda assistant VP-national advertising. "You don't dare take your eye away."

American Honda budget details and how advertising will be apportioned this year are "still secret stuff," Mr. Conn says. He expects the budget to remain even and to be spread thinner.

Mr. Conn, a 24-year Honda veteran, admits the challenge is to maintain momentum. "We just have to work hard, smart," he says.

"Our DQR [dependability, quality, reliability] is a huge influence on consumer purchases, especially in a down market," adds Mr. Garner.

He says the Honda Division expects to use many of the ad strategies that worked last year. "We've been very consistent over the years," he says. "We have an extremely well-known brand and name. Our advertising is very consistent."

At press time, American Honda agency Rubin Postaer & Associates, Santa Monica, Calif., was fine-tuning commercials for the Honda Civic Hybrid, debuting in mid-April.

The Civic last year was the top-selling small car in the U.S., and Honda plans to extend the Civic's reach into the 18-to-34-year-old demographic. The revamped Si is plugging into metal rock and alternative concerts, expanding to 55 markets from 18 during last year's inaugural Civic tour (see related story above).

The rugged but spartan Model X crossover, Honda's other youth-buster out in spring, aims at the under-25 crowd and will be supported primarily through active youth media and Internet marketing. Honda last week unveiled the 2003 Element, a small SUV, at the New York Auto Show.

At luxe-oriented sibling Acura, "Our focus will be on keeping the momentum going, to keep the ball rolling and keep dealers upbeat," says Mike Spencer, marketing communications manager. He hints that new Acura products will come down the pipeline a year from now and will have "the rest of the industry taking notice of Acura."For 2002, three vehicle lines will get major ad attention: the CL luxury performance coupe, TL "bread and butter" luxury performance car and MDX sport-utility.

Acura media support for `02 continues to run on spot TV; targeted cable networks such as A&E, CNN, Discovery Channel, ESPN and History Channel; network sports; and upscale lifestyle magazines.

"All individual model commercials continue to position Acura as a premium brand that is approachable and human," says Joan Egan, senior VP-account director for Acura at Rubin Postaer. The spots focus on "the joy of driving"- important in appealing to the young male targets of the TL and RSX lines, she adds.

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