Brian Benstock believes Honda's product lineup has what it takes to get the automaker through potentially bumpy times ahead.
Stagnating industry sales and rising interest rates will present challenges to dealers of all stripes. Despite this, Benstock says the company is well-positioned to stem the tide even as the brand fights through a down period to start the year.
Sales of the CR-V crossover, along with the Civic and the Accord — the reigning North American Car of the Year — are all trailing 2017 performance. But the vehicles rate highly, and Benstock says he can't think of a manufacturer with a better product line than Honda's.
The lineup will only get deeper with the rumored return of the Passport, which would be slotted between the CR-V and Pilot crossovers, along with a more stylish Insight hybrid sedan that could have broader appeal than its predecessors.
Looking ahead, the brand could use a sports car like the S2000 to fill out the portfolio, said Benstock, general manager of Paragon Honda and Paragon Acura in New York City.
Benstock, 57, has been a Honda dealer for more than 20 years and also is a board member for the TriHonda dealer ad group that represents Connecticut, New Jersey and New York. He spoke with Staff Reporter Vince Bond Jr. about Honda's push to electrify, challenges facing dealers and the brand's growth into a powerhouse for utility vehicles.
Q: How do you feel about Honda's lineup?
A: Honda's current lineup has never been better. We don't have a weak spot in the lineup. From our entry-level models to our top-of-the-line models. We have offerings in the hybrid space, in the combustion engine space. Honda's turbo-driven plants are being received well.
We've heard that Accord production is going to be trimmed. Do you agree with that strategy?
I don't want to outthink Honda. I think they know what they're doing. The segment is struggling across all brands with low fuel prices and incredible fuel economy of SUVs. I think many customers are feeling that the mini SUVs are providing a great alternative to sedans. We have to stop worrying about what consumers are consuming in terms of transportation. Be more concerned when they're not consuming. I don't care if they're switching from an Accord to a CR-V or HR-V or to a Pilot — as long as they are consuming our brand. Consumers are always going to do what's best for them. I used to like station wagons, but there became alternatives to station wagons. I haven't seen too many station wagons around. The SUV has been a fantastic all-purpose vehicle for many American individuals and families.
Are you seeing people go from the Accord to your crossovers?
Absolutely. These are segments that some years ago never existed. HR-V, more recently. You have another fragmentation of that segment. It used to be the bigger vehicles, the Pilot. Then there was a niche underneath that that the CR-V filled nicely. Then in comes this HR-V that really bridges the gap between the Civic to SUV, or Accord to SUV, transition for many customers. Especially in a metropolitan market; you have all the benefits of all-wheel drive with something that is still economical and like-sized. I'm not suggesting that HR-V replaces a Pilot or bigger vehicle; it's not meant to. But it is for that person who would ordinarily be driving a Civic or Accord to have an alternative. They're so price competitive with the sedan segment, no wonder the sedans are struggling. With that being said, the Honda Accord is the best sedan Honda's ever built. Hands down.
The Passport is coming back. Does it have potential in the market?
It's nostalgic for me because that was our first entry into the SUV world. [Honda] had to partner with [Isuzu] in the SUV market. The Passport name is a good name by any standard. With Honda being 100 percent behind the production of it, I think it will be really exciting.
Can you believe the improvement Honda has had in the utility market in the last two decades?
Being a purist and being with Honda when they didn't have a single player in that [segment], it's really gratifying to see when Honda sets their mind to something what they're able to accomplish. Whether it was their first entry into Formula One racing, or what they do in motorcycles. When this company decides they're going to do something, they do it, and they do it better than anybody else. All this talk of the electrification of the industry, we were part of a pilot dealer that had a Honda EV in the mid-'90s, a fully electric vehicle in the mid-'90s.
I see Honda is bringing the Insight name back.
This Insight is real good-looking. I think people want to be environmentally conscious, but we don't want to drive cars that look like they're that way. We want a car that looks good and has good sex appeal, good buy appeal and at the same time is environment friendly. They hit the mark there.
Is the customer base for the Insight broadened because it looks much better?
No question about it. Certain people will not drive something that looks like an econobox. They made it now where you can be environmentally conscious and not have to look like an environmentalist. I think it's a beautiful car.
What are some of the biggest challenges facing Honda dealers today?
You have an economy that's been expanding for 10 years. There are questions surrounding that. You have interest rates that are creeping up. Look at [the London Interbank Offered Rate] in the past year; it has gone from .75 to 1.5. That'll impact dealer profitability. At the same time, as interest rates go up, market demand tends to go down. You have a lot of entrants coming to the market that are all vying for our position. I'm thankful that American Honda has such a strong line going into these slightly bumpy times. I can't think of a better product line than what Honda offers its dealers. No brand is as well-positioned as Honda is right now.
How is the communication between Honda and its dealers?
Honda gives us, through the National Dealer Advisory Board, open communication lines. The NDAB does an excellent job in sharing with top management, in both America and Japan, the concerns of the dealers. To Honda's credit, they really do listen. They don't always act as quickly as we might like, but I also understand that. They have to temper what the dealers' needs are with what they think is in the best interest of the overall company and our customers.
Are there any holes in the Honda product lineup that you want to see filled?
We're looking for a little sports car. I understand one is in development, whether that be a derivative of the S2000. I think a little sexy sports car would be great.
How do you feel about the V-6 being dropped for the 2018 Accord?
[The V-6] is unnecessary. If you've driven the 2.0 turbo Accord, it's completely unnecessary. Honda has that on the shelf and, should market demand change, it's there. But if I'm driving on a highway in the United States, I can get there with a four-cylinder aspirated engine as well as you can with a V-6. There's no lack of power. Honda Motor Co. makes among the highest number of four-cylinder engines in the world of all manufacturers. They have a lot of technology in their motorcycle base. They've learned how to get incredibly high horsepower and torque out of the smaller, more economical engine. I think when you do that, everybody wins.
There's not a big performance drop-off from what you've seen?
Not at all. The sedans don't need it. A few years ago, dealers were pushing for us to have an eight-cylinder. It's just not the direction that the world is going in. It's not in alignment with Honda's environmentally friendly attitude. If there was a concern about power, they would've never made the change. They have the solution. Do the consumers want a six-cylinder, or do they want a car with sufficient power? I think the answer is they want a car with sufficient power to meet their needs. I think Honda has filled that gap nicely.