[Junkster]

http://msnbc.msn.com/id/4353853/

I have to agree to some extent that the niche market cars are becoming the 'trend' of the year. But without sufficient mass market sales, there is no way a company can propel itself further in the black.

The Taurus example was great. The Solstice experiment will also be interesting.

Which brings me to the relevance of this article to this forum:
Is the TSX a niche car that should be expanded? I mean, 15~20k of cars sold can't be great for the profit margins.

Junkster, who is bored at work.

 

[larchmont]

.....Junkster, who is bored at work.

Did today's mail come yet? :ikno:

I guess it probably did.....


But about the TSX being a niche car...... Although of course I love the TSX and it was sort of the car I was waiting for, I really don't know what Honda/Acura had in mind with the car.

The thing is, it doesn't seem like they make enough TSX's for it to be financially worthwhile in and of itself. Which leads to various possibilities:

(1) They're not doing this for money.

We can rule that out pretty quick. So I'm going to start over......

(1) They DO make enough money on the TSX. I suppose this would be possible if the profit margin is unusually high. Anybody know what the profit margin is per car on the TSX? Well, that would be hard to find out, and besides it's not a fixed figure because the start-up costs make the margin less at first and more later on.

Or.....

(2) They were pretty sure that the TSX would be a great success, which would then allow them to raise the price significantly for the next model year.
I think they will raise the price a few hundred dollars -- my guesstimate has been $800. But, maybe this still wouldn't give enough of a profit margin to be worthwhile.

Or.....

(3) They were planning all along to increase the production significantly within a couple of years, and in view of the car's success, they'll be able to go ahead and do it. How much of an increase? I suppose they could look to double or triple it. Would that be enough to make the car profitable enough to be worthwhile? I'd guess probably yes.


Or some combination of those things.


OR.......... related to my original #1:

(4) The TSX is just sort of an experiment, in either engineering or marketing or both, for Honda/Acura to find out something, which will guide them on some future larger-selling cars. Maybe something about the comparison of how North America and Europe respond to such a car. Maybe something else.


That's about it.

 

[larchmont]

Re: Re: Interesting auto article

Did today's mail come yet? :ikno: .....

Maybe he doesn't find out till he gets home.


(Don't worry, I won't be asking every day.)

 

[Junkster]

Re: Re: Re: Interesting auto article

Maybe he doesn't find out till he gets home.


(Don't worry, I won't be asking every day.)

They said they'd email first this year, than send the hard copy. They also have a website that tells you of your status and is SUPPOSE to update every Friday, but hasn't been updated in about 2 months.

This TSX nich/limited number thing is kinda surprise, since it is up against the other entry level luxury cars in the market, which are not in limited production and very prevalent at dealerships. You usually find a buttload of 3's, A4's or 9-3's on any of the maker's dealerships. Yet, when visiting an Acura dealership these days, I usually see more TL's and RSX's on the lot than TSX's . Go figure, I still can't figure this marketing/production strategy at all.

Junkster, who isn't surprised that 'postwhore' responded the quickest

 

[larchmont]

Beg pardon?

 

[sjlee]

I think Acura limited the production to ~15,000 to see how well it was received. They easily sold that many by late fall last year, so I would expect Acura to increase production. You should realize that the TSX is outselling the RSX, which isn't saying a whole lot, but shows that it at least isn't their worst selling mass produced car.

 

[kiteboy]

Just posted my rely on the other site:

The TSX platform is not niche. Honda makes over 100k JDM and Euro Accords. Further, it's still a variant of the global mid-size platform used for the USDM Accord, TL and Inspire. There's a lot of shared engineering here.

Is Honda making money on the S2000?

-----------
Kiteboy, who's going to have to find a way to parallel post now.

 

[kiteboy]

To reply to some of the other comments here:

I bet Acura set the 15k target not for nice reason, but because:

- they weren't sure how well the I-4 TSX would do against the V6 Accord which costs a bit less.

- the plant in Japan is busy pumping out Accords for JDM and Europe at higher profits.

- it's a new price point for them, more than the Integra sedan, but less than the TL (well okay, it's where the old Vigor was).

------
Kiteboy, whose liking this unique sig thing.

 

[Whatchamacallit]

Even with the great success Acura has been having with the TSX, Acura desperately needs to expand their lineup. With the CL being phased out, the new RL being overlooked by many potential buyers, and the RSX sales tanking, Acura basically only has 3 models (MDX, TL, and TSX) that's doing well.

Increasing the production of TSX is one good way to rake in the dough but why not also add additional trims/options to these 3 models? Demand comes and goes. They need to take advantage of it before the demand subsides. :tribe:

 

[sjlee]

Just posted my rely on the other site:

The TSX platform is not niche. Honda makes over 100k JDM and Euro Accords. Further, it's still a variant of the global mid-size platform used for the USDM Accord, TL and Inspire. There's a lot of shared engineering here.

Is Honda making money on the S2000?

-----------
Kiteboy, who's going to have to find a way to parallel post now.

I agree, worldwide, the TSX/Accord platform is not a niche, however, in the US, it could be perceived as that.

In any case, you have a valid argument with the S2000. The same argument could also be applied to the every other model Acura sells (RL, NSX) as they don't even come close to the production numbers of even the RSX.

I don't think Acura/Honda would continue making these cars if they were losing money on them year after year.

 

[sjlee]

- it's a new price point for them, more than the Integra sedan, but less than the TL (well okay, it's where the old Vigor was).

Actually, didn't the TL replace the Vigor?

Integra -> RSX, TSX
Vigor -> TL
Legend -> RL

 

[larchmont]

Sort of, although I would agree with Kiteboy that the new TL is basically filling the niche that the Vigor left behind. (He was talking mainly about price; I would say that even more generally, it still applies.) The thing is, with Acura cars in general it's hard to say exactly what equals what. Like, even when it was clear, that didn't exactly work either, which I think was one of Acura's problems over the last 15 years.

Sometimes even the exact same car wasn't really related to itself. The best example is the new TL, which has almost nothing to do with the '03 TL. I still think it was a mistake for Acura not to change the name. Indeed there have been some benefits of keeping the name -- for example, it "fools" some of the mags (etc.) into giving the car "credit" for the old TL's track record on reliability. But no matter how successful the new TL is or might be, you'll have a hard time convincing me they wouldn't have done even better renaming the car, because the cars are so different that it's really somewhat different markets.

Another example is the old Legend. While there was never any single drastic change like with the TL, they kept "growing" the car, so that even though I loved my '88, within just a few years the car was too big for me to consider.

So......Yes, in terms of the current lineup, the RL sort of replaces the Legend -- not the original Legend, but the "eventual" Legend, which sort of bombed, just like the RL has been basically doing. But, when the TL first came out -- that is, the "old" TL, THAT was the replacement for the Legend -- pretty explicitly, I think. The Vigor, as I see it, was an attempt to get back the "vigor" of the original Legend, and I think that was a good idea but there must have been quality problems -- how many Vigors do you see any more? And how many years has it been since you saw one? For me, it's been years, yet I still see Legends from around '88 on the road. See how complicated it is? I don't think anybody could keep it straight, because it hasn't been straight.

 

[kiteboy]

Vigor --> 2.5TL

I forgot the displacement of the Vigor, but remember it had a I-5 engine. The current TL would a descendent of the bigger engine variant, 3.2TL.

I maintain the TSX is not niche based on the argument of the article, which was that low volume niche cars are less profitable because of the high fixed startup costs involved in engineering a new platform. While the TSX model is low volume, the combined TSX/JDM/Euro Accord numbers offsets the costs of designing the platform in the first place.

 

[kiteboy]

Sometimes even the exact same car wasn't really related to itself. The best example is the new TL, which has almost nothing to do with the '03 TL. I still think it was a mistake for Acura not to change the name. Indeed there have been some benefits of keeping the name -- for example, it "fools" some of the mags (etc.) into giving the car "credit" for the old TL's track record on reliability. But no matter how successful the new TL is or might be, you'll have a hard time convincing me they wouldn't have done even better renaming the car, because the cars are so different that it's really somewhat different markets.

The current TL is based on the 02 Accord, while the previous 3.2TL was based on the 98-01 Accord. Are they completely different? I'm not sure. I think the engine is pretty much carried over from the 03 TL-S, however.

To me, the Legend jumped the shark when it got renamed to RL and Acura went to the alphabet soup names. The Legend had a very good brand image, arguably stronger than Acura itself (which is why they switched names). People would "I have a Legend" not "I have an Acura". The RL tossed all that out the window.

 

[sjlee]

The current TL is based on the 02 Accord, while the previous 3.2TL was based on the 98-01 Accord. Are they completely different? I'm not sure. I think the engine is pretty much carried over from the 03 TL-S, however.

To me, the Legend jumped the shark when it got renamed to RL and Acura went to the alphabet soup names. The Legend had a very good brand image, arguably stronger than Acura itself (which is why they switched names). People would "I have a Legend" not "I have an Acura". The RL tossed all that out the window.

Yes, I believe the engine in the current TL is tuned version of the previous Type-S engine.

Back when they had the Integra, Vigor and Legend, all three cars were considered sporty luxury cars that were reliable and priced well, which I think made them very popular.

I think when Acura decided to move away from the sportiness, they lost their appeal. As well, their competitors started the continuing trend of offering sport sedans. When the RL was introduced, it looked more like an old E-class Mercedes. Then the TL came out, which basically was a scaled down version of the RL, which basically meant that the only "sporty" car available was the entry-level Integra. Sure they had the NSX, but it is too expensive and limited in production to include it with the mass produced models.

With the new TSX and TL, it looks like Acura is coming back to making the sport sedans that made them popular. Hopefully the new RL will keep up the trend.

By the way, when I said that the Integra -> RSX/TSX, etc., I meant that the models all fill the same market as their predecessors. For instance, the Vigor was Acura's model that filled the gap between their entry-level car and their flagship... the same way the TL does it now. I didn't mean that the cars were related mechanically.

 

[larchmont]

Yes, I believe the engine in the current TL is tuned version of the previous Type-S engine.

Back when they had the Integra, Vigor and Legend, all three cars were considered sporty luxury cars that were reliable and priced well, which I think made them very popular.

I think when Acura decided to move away from the sportiness, they lost their appeal. As well, their competitors started the continuing trend of offering sport sedans. When the RL was introduced, it looked more like an old E-class Mercedes. Then the TL came out, which basically was a scaled down version of the RL, which basically meant that the only "sporty" car available was the entry-level Integra. Sure they had the NSX, but it is too expensive and limited in production to include it with the mass produced models.

With the new TSX and TL, it looks like Acura is coming back to making the sport sedans that made them popular. Hopefully the new RL will keep up the trend.

By the way, when I said that the Integra -> RSX/TSX, etc., I meant that the models all fill the same market as their predecessors. For instance, the Vigor was Acura's model that filled the gap between their entry-level car and their flagship... the same way the TL does it now. I didn't mean that the cars were related mechanically.

Great post.
At first I thought for sure there was one mistake here, about the Vigor being considered reliable. So, I checked the one source that I have handy, Consumer Reports, and by golly he's right. At least according to CR, the Vigor's "predicted reliability" was always top. But, maybe it's 20-20 hindsight on my part, but I could swear that somehow I never considered them reliable. Don't know why -- maybe I heard some stories, maybe I saw a couple of them disabled on the highway, I don't know.
And -- even though this is also 20-20 hindsight -- if they were reliable, how come we hardly ever see them any more? I know this isn't the same thing -- reliable doesn't mean lasting a real long time. But I do think there's a correlation. As I've noted, I still see a fair number of Legends that are older than any Vigor, but I haven't seen a Vigor in years.

More generally about Acura's problems in the early and mid-'90's, I could put it more simply: Pretty quickly after the late '80's, even though they still had a "Legend" they no longer had a car that was enough like that Legend of the late '80's that had been so great and which (I thought) was successful.
What I do know is that quite of few of them are still going strong.
BTW the dude who bought mine (an '88) is doing well with it.

 

[sjlee]

And -- even though this is also 20-20 hindsight -- if they were reliable, how come we hardly ever see them any more? I know this isn't the same thing -- reliable doesn't mean lasting a real long time. But I do think there's a correlation. As I've noted, I still see a fair number of Legends that are older than any Vigor, but I haven't seen a Vigor in years.

Well, for one thing the Vigor was only offered for 3 years.

I've read some interesting reasons why the Vigor didn't really catch on... one being the small back seat, the other being the 5-cylinder engine (not the standard I-4, I-6, V-6 or V8).

Heh, I read that it didn't come with cupholders... maybe that's why it failed... Wasn't it Homer Simpson who designed his car to have cupholders everywhere?

Here's an interesting article in Forbes magazine about why Acura hasn't done so well in the recent past...

http://www.forbes.com/home/2003/04/01/cz_jf_0401flint.html

 

[larchmont]

Well, for one thing the Vigor was only offered for 3 years.

I've read some interesting reasons why the Vigor didn't really catch on... one being the small back seat, the other being the 5-cylinder engine (not the standard I-4, I-6, V-6 or V8).

Heh, I read that it didn't come with cupholders... maybe that's why it failed... Wasn't it Homer Simpson who designed his car to have cupholders everywhere?

Here's an interesting article in Forbes magazine about why Acura hasn't done so well in the recent past...

http://www.forbes.com/home/2003/04/01/cz_jf_0401flint.html

Interesting article, although we should note that it's from almost a year ago.
I see they say flat-out that the RL was a replacement for the Legend. As a former long-time Legend owner, I still don't see it. Even if it's technically correct, I don't see it as being practically right.

They also say flat-out that Acura has the "drawback" of FWD.
Well, I wouldn't even have looked at a car that was RWD.

About 5-cylinders: What's the deal? Including, what's the problem? Is it just that 5 is still less than 6?
How many TSX owners would kill for at least a 5th cyl?

I once explained that cars don't usually have 5-cylinders for the same reason that horses don't have 5 legs.
But of course I don't really know.

 

[sjlee]

Interesting article, although we should note that it's from almost a year ago.
I see they say flat-out that the RL was a replacement for the Legend. As a former long-time Legend owner, I still don't see it. Even if it's technically correct, I don't see it as being practically right.

They also say flat-out that Acura has the "drawback" of FWD.
Well, I wouldn't even have looked at a car that was RWD.

About 5-cylinders: What's the deal? Including, what's the problem? Is it just that 5 is still less than 6?
How many TSX owners would kill for at least a 5th cyl?

I once explained that cars don't usually have 5-cylinders for the same reason that horses don't have 5 legs.
But of course I don't really know.

Like I said before, they aren't really saying that the RL is the same kind of car, but rather they were/are Acura's flagship.

I think that Acura would do better if they offered at least one mass produced RWD model. Remember, BMW and Mercedes both offer RWD vehicles and that's the market Acura is going after.

I think it isn't so much there a problem with 5-cylinders, it's just that they aren't common. I think that alone "scares" off some customers.

 

[larchmont]

.....I think that Acura would do better if they offered at least one mass produced RWD model. Remember, BMW and Mercedes both offer RWD vehicles and that's the market Acura is going after.....

Even though a lot of people say this, I don't have the impression this is exactly true, and I think it would be a mistake for Acura to try it.

Acura has sort of a niche. It might not be as big a niche as they'd like, but it's a niche.
And that I think this "niche" is, among other things, mostly a FWD market.

Companies generally do best building on whatever their current niche is; going beyond it is very risky. It looks to me like Acura is trying to stay within that FWD niche and build cars of that type that are more and more desirable, and more and more state of the art. BTW adding some AWD cars would fit great within what I'm saying. Building more RWD cars wouldn't.

Acura has a "thing" that they do, and they do it mostly well. They fell off the track a bit for about 10 years, which is a long time, but not so far off it that they need to change their basic approach. And in the last couple of years, they've been getting back on very well.

IMHO.

So I say, keep it up, Acura!
Good performance
Efficient (space-wise as well as fuel-wise)
Great value
Fun
Extremely reliable
State-of-the-art
Classy
......and, FWD (or AWD).

Keep doing it, and do it better and better.