Accords' average price rises slightly Automaker's move seen as way to pressure Detroit's Big Three

Automobile industry

September 26, 1997|By BLOOMBERG NEWS

DETROIT -- Honda Motor Co. yesterday raised the average price of its new Accords by 0.5 percent, or $110, while cutting the price of V-6 models in a move that analysts said is likely to pressure Detroit's automakers.

The price of the six-cylinder Accord LX was cut by $950, to $21,550, for 1998. The price of the most popular Accord, the four-cylinder LX sedan, rose by $100, to $19,090.

Honda's pricing mirrors that of other automakers, who have raised 1998 prices modestly, if at all, in the face of some softening of demand and increased competition. It also reflects Honda's efficient production methods.

The new Accord "slows down the Big Three's ability to attract new buyers from import brands," said Susan Jacobs, an auto industry consultant in Rutherford, N.J.

General Motors Corp. and Chrysler Corp., which have introduced new midsize models, are especially vulnerable to pressure from the new Accord, analysts said. The Accord and Toyota Motor Corp.'s Camry combine new designs and modest price increases with a reputation for quality.

Detroit automakers' car sales through August fell to 3.46 million, down 7.1 percent from the year-earlier period. Asian-brand car sales rose 2.3 percent to 1.27 million.

The Accord was the second best-selling car in the United States last year, after the Ford Taurus, and is expected to finish in the top three with the Taurus and Camry this year. Honda's Marysville, Ohio, plant is accelerating production and might build more than 400,000 Accords next year. Honda sold 382,300 Accords last year.

Better efficiency in the Accord's design and the Marysville plant helped Honda add $2,000 in equipment to the new model, said Dick Colliver, executive vice president for American Honda Motor Co.

Honda saved costs by designing the new Accord in 24 months, compared with 32 months for its predecessor.

Accord sedans went on sale yesterday. The company will boost Accord advertising and marketing spending by 30 percent from last year to more than $100 million, said Paul Sellers, Honda's national advertising manager.

Honda division expects to exceed its goal of 775,000 U.S. sales this year, though Colliver wouldn't say by how much.

Sales next year would rise 0.6 percent to 800,000, including up to 150,000 vehicles imported from Japan, he said.

Pub Date: 9/26/97

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.