Honda spinning off Acura as stand-alone division in bid to wake up brand

Tue, 11 Mar 2014

Every major automaker has a different way of relating between its various divisions and brands. At Volkswagen, for example, the individual brands seem to operate with a large degree of autonomy. Under the Renault-Nissan Alliance, the two units share a common chief executive, but little else. The relationship between Honda and its luxury division Acura has always been rather close, but that's all about to change.

American Honda Motor Company has always handled sales and marketing in the North American market for both the Honda and Acura divisions, but new reorganization plans call for the two units to be separated under their own direction. Leading the Acura division will be Michael Accavitti, who moves into the position from his role as Senior Vice President for Auto Operations at American Honda. The Honda division will meanwhile be taken over by the current head of Acura sales, Jeff Conrad.

Both will report to John Mendel, the current executive vice president of the Automobile Sales Division that is being rebranded as the American Honda Auto Division. Unlike rivals Lexus and Infiniti – two brands that Acura beat to the market – Honda barely markets its luxury brand outside of North America. Its overseas presence is felt only in China, though we've yet to receive word on how the reorganization might effect that market – or for that matter, any potential of expanding into others.

This reorganization is seen as a vital step in revitalizing the Acura brand, accompanied by a product line overhaul that's concentrating on new sedans like the ILX, TLX and RLX, but also promises to yield new crossovers and the new NSX as its halo model. The reorganization takes effect on April 1, which may ring some alarm bells on the hoax-o-meter, but this wouldn't strike us as a very funny joke if it were one. Scroll down for the official announcement.

American Honda Strengthens Auto Sales Division to Accelerate Sales Growth of Honda and Acura Brands
03/10/2014 - TORRANCE, CA

American Honda Motor Co., Inc., will strategically realign its automobile sales and marketing operations into separate divisions organized by brand, as the Honda Division and Acura Division. The moves, effective April 1, are intended to create greater clarity and more cohesive sales and marketing plans that are right for the products and customers of each brand.

In conjunction with the strategy, the following executive changes were announced:

Michael Accavitti will become senior vice president and general manager of the Acura Division. In his new role, Accavitti will be responsible for all sales, marketing and parts and service business for the Acura brand. Accavitti joined Honda in 2011, and is currently the senior vice president of Auto Operations, which includes responsibility for national marketing for the Honda and Acura brands.

Jeff Conrad will become senior vice president and general manager of the Honda Division. Conrad will be responsible for all sales and marketing activities for the Honda brand. Conrad joined American Honda in 1982, and is currently the vice president and general manager of Acura Sales.

American Honda automotive operations have long been separated by function rather than by brand. These moves will result in exclusive divisions, with dedicated sales and marketing teams for Honda and for Acura. Both brands will be housed under a single "American Honda Auto Division" to be headed by John Mendel, executive vice president of what is now called the Automobile Sales Division.

"Our goal is to accelerate the already strong sales growth of the Honda and Acura brands through a more cohesive strategy, with a heightened focus on the unique needs of luxury and mainstream customers," said Mendel. "These moves will more completely align the major activities for the Honda and Acura brands under dedicated brand leaders to take advantage of new opportunities in the marketplace with greater speed and efficiency."

Further, the strategy behind the creation of the Acura Division coincides with the recently announced establishment of a new Acura Business Planning Office, also effective April 1. This new entity will focus on strengthening the business and product strategies for the Acura brand. Erik Berkman, currently president of Honda R&D Americas, Inc., will become an executive vice president of Honda North America, Inc., and will lead the Acura Business Planning Office.

"The realignment strategy that has created a new Acura Division reflects our growing commitment and the increased level of resources and leadership we are focusing on the Acura brand on a global basis," said Mendel.

In addition to steady sales growth for the Honda and Acura brands in each of the past two years, both brands will continue to introduce new models in 2014. This spring, Honda will launch the all-new 2015 Honda Fit, to be followed later this year by an all-new compact Honda SUV. The Acura brand will introduce the all-new 2015 Acura TLX luxury performance sedan by mid-year.

"The best time to make a change is when you're in a position of strength and we are not only coming off a great sales year, we are continuing to create new opportunities with a series of new and exciting Honda and Acura models," said Mendel.

American Honda enjoyed near record automobile sales of 1,525,312 vehicles in 2013, the second best sales total in company history. Sales of Honda brand cars and trucks totaled 1,359,876 vehicles, an increase of 7.4 percent. Honda was led by the success of core models, with the Honda CR-V posting all-time record sales in 2013 to rank as the top-selling SUV in America, the Civic ranking as the top-selling compact car, the Odyssey ranking as the top-selling minivan, and Accord ranking as the best-selling car in America with individual car-buyers.

Sales of Acura brand cars and trucks totaled 165,436 vehicles, an increase of 5.9 percent, and its best sales total since 2007. Further, sales of the Acura MDX and RDX in 2013 combined to achieve Acura's best sales year ever for light trucks.

By Noah Joseph