"What makes this ILX story different from virtually every other refresh and redesign — in addition to all of the exterior and interior and technology upgrades — is really the repositioning of the product in the marketplace, which makes it very unique," said Mamadou Diallo, who was recently promoted to assistant vice president of national sales.
"It was actually counterintuitive, if you look at it from a standpoint of basically lowering ILX pricing over $2,000 with the expectation that we would actually see better results, not just higher volume but better price, profit and customer engagement," Diallo said in an interview.
The sales executive doesn't think that the lower starting price dilutes Acura's brand image compared with pricier rivals. "You look at all of these brands, they're all sort of vying for that sub-$30K market, and there are two ways to go about it: You can either be above $30K and throw in a whole bunch of incentives that gets you below it, or you can just basically reposition your car and not have to spend the incentives," he said.
A lot of the strategy was aimed at younger buyers looking to get into their first luxury car. They are looking for fresh styling and lots of tech and safety features, along with an easy monthly payment. While the base model represents only about 10 percent of all buyers, its segment-leading price and features allow room to move up to higher trims.
The ILX with the A-Spec package is chosen by about one-third of buyers, with a starting price of $31,145, including shipping. The highest trim comes in at $33,045, including shipping, a relative bargain in the luxury segment.
"Suddenly you're no longer leading just with your lease offering, but you're leading with a very attractive MSRP that also gets all these non-heavy lease states into play," said Diallo.
"From a dealership standpoint, the excitement was very, very high when they saw that refreshed product. It got all of our dealers truly reengaged with the vehicle and they are conquesting quite a bit," he said. "Dealer margins are up based on this pricing structure."
Based on Acura's new-car owner survey, ILX conquests from rival luxury brands have risen by 3.5 percentage points and conquests from mainstream competitors are up 2.5 percentage points. The ILX leads Acura in terms of first-time, millennial and multicultural buyers, and half stay with the brand for their next vehicle, Acura said.