Youngstown Daily Legal News

SUV trend hurting sales of locally built Acura luxury cars

BRANDON KLEIN
Special to the Legal News
Published: October 4, 2018

Sales of two Acura luxury sedans built in central Ohio continue to struggle as buyers prefer sport utility vehicles and trucks.

Year-to-date U.S. sales in August for the Acura ILX, an entry-level sedan, declined 6.9 percent from last year while sales for the Acura TLX, a midsize sedan, declined 13 percent, according to a press release from the American Honda Motor Co., which builds the sedans at the Marysville Auto Plant that also builds the Honda Accord.

The ILX and TLX will struggle to meet their sales levels in prior years. Honda has sold 7,312 ILX models and 20,853 TLX models as of last month.

The company sold a total of 11,757 ILXs in 2017, down from 14,597 vehicles in 2016, the year the sedan's production location switched from Greensburg, Ind., to Marysville.

ILX sales have decreased nearly 39 percent since 2014 when Honda sold 17,854 vehicles of the model. That same year was when SUV sales surpassed sedans. Pickup trucks and SUVs now make 60 percent of new vehicle sales, David Kiley wrote in a July article for Forbes magazine.

"The growth of SUV sales, driven by long-term gas prices below $3.50 per gallon and consumer tastes is so baked into automaker plans that Chrysler and Ford have said they are not developing any new sedans and plan to phase out the ones they market now," he said.

The TLX has faced similar challenges since it made its August 2014 debut. Honda sold 47,080 TLXs in 2015 compared with 19,127 vehicles in 2014. From 2015 to 2017, the model's U.S. sales have decreased nearly 30 percent as the company sold 34,846 TLXs last year.

August sales indicated the continue decline of cars as its overall share decreased to 28.9 percent of the market, while trucks soared to a new high of 68 percent of all sales, according to Kelly Blue Book report released earlier this month.

"For the first time in U.S. automotive history, monthly car share is on pace to dip below 30 percent," said Zo Rahm, research manager for Cox Automotive, the parent company of Kelley Blue Book, in the report. "This is a dramatic shift - car share was near 50 percent just 5 years ago. With the drop, it's tough to forecast where share will finally level out, as consumers have decidedly killed the car. Our initial idea of the floor being somewhere in the low-30-percent neighborhood appears to be too high in a market that loves its trucks and SUVs."

Overall, Honda's Acura division sold 100,972 U.S. vehicles for the year up until last month, down from 2 percent.

The company's RLX/RL model U.S. year-to-date sales in August were up 71.9 percent, while the sales for Acura RDX, the brand's first compact luxury SUV, were up nearly 10 percent.

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