SAN FRANCISCO -- As Lexus, Mercedes-Benz and BMW battle for luxury brand sales leadership this year, Acura has been flying below the radar -- as usual.
Honda's upscale division has had a solid year. Sales are up 24 percent over 2009, outpacing the gains made by luxury's big 3. But the recession knocked Acura's ambition to become a first-tier luxury player way off course.
To hold down costs, two years ago Honda executives in Japan halted plans for a V-8 engine and rear-wheel drive. Now Acura is still trying to figure out "who we are and who we want to be," said Vicki Poponi, American Honda Motor Co.'s assistant vice president for product planning.
The industry crisis changed everything for Acura.
"The direction we were going became irrelevant within 60 days," said Steve Center, chief marketing officer for American Honda, referring to the economic crash after the collapse of Lehman Brothers in the fall of 2008. "We missed the window. We've had to reconnoiter. We had to go with our strengths."
Acura does have strengths. Automotive Lease Guide has rated it the top luxury brand for residual value for the past two years. It shot from 14th to second in J.D. Power's Initial Quality Study, trailing only Porsche.
And Acura spends just $2,600 per vehicle on incentives, the lowest of any luxury brand except Lexus, according to TrueCar and Autodata.
But while those strengths would appeal to a mass-market brand, they do not solve Acura's image problem, which is the lack of a defined prestige image.
The best Poponi can muster is that Acura is the brand "for people not comfortable wearing BMW or Mercedes."
"Nobody really needs a luxury car," she said in an interview at the introduction of the TSX Sport Wagon. "It's a more emotional purchase. But there are more rational buyers who want all the accoutrements of luxury but who want stealth wealth."
At the same time, Poponi said, marketing to "anti-snobs" probably isn't the best formula. Instead, Acura is aiming its "smart luxury" message squarely at Gen Y, the generation struggling with diminished earning power and a mountain of college loan debt.
"Attainability is still cool to them, and they like nice things," Poponi said. "But they're happy with a Coach bag; they don't need Louis Vuitton."
At Acura's recent national dealer meeting in Denver, executives unveiled an attitude closer to the brand's original slogan in the 1980s: "precision-crafted performance."
"Lexus may hit the mark on luxury on the prestige side," said dealer Doug Fox, president of Ann Arbor Automotive near Detroit. "But Acura is still moving toward a performance-oriented vehicle that is a great value, with normal maintenance and ownership costs."
That still doesn't gain Acura credence in the luxury-vehicle fight. Acura buyers' two most cross-shopped brands are Honda and Toyota, although BMW, Audi, Infiniti and Lexus are close behind, according to Edmunds.com.
Also, Acura's average transaction price of $37,665 is $5,000 less than its nearest luxury competitor, according to TrueCar. Edmunds says the most traded-in vehicles for an Acura -- besides another Acura -- are Honda, Toyota and Nissan.
All this categorizes Acura as a move-up brand from the mass market, but not something aspired to by other luxury customers.
"Acura's identity isn't clear to many luxury buyers," said Jesse Toprak, TrueCar vice president of industry trends and insights. "If I'm spending that kind of money, do I want an Acura, or a BMW or Benz? Acura simply doesn't have the same prestige. Once you hit the $45,000-plus market, many buying decisions are based on image."