20th Acura Anniversary- Acura History
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20th Acura Anniversary- Acura History
20th Acura Anniversary- Acura History
Torrance, CA - January 8, 2006 -- Acura History
As Acura celebrates its 20th anniversary, it stands as a leader in the luxury performance market with cars and trucks like the RL, TL, MDX and TSX. By combining technological innovation with world-class performance, contemporary design and luxurious appointments, Acura has captured the public's imagination.
The story of how Acura was created, launched and then grew into a major force in a competitive marketplace is a compelling testament not just to the company's products, but to the people who had the foresight to establish the first premium Japanese luxury car brand. History shows that Acura not only redefined the luxury car, it permanently changed the luxury marketplace from a slow evolution among a handful of brands to fierce competition between many. While today Japanese luxury brands are taken for granted, this was not the case in the early 1980s, when the groundbreaking Legend sedan was still on the drawing board.
The Plan
The early 1980s were a tumultuous time for the U.S. car market. Gas shortages, economic malaise and new government regulations in the 1970s caused an upheaval in the public's buying habits and the products available to the public changed dramatically. Small was big and Japanese manufacturers such as Honda had forged reputations of reliability, economical operation and low price that were the envy of many competitors. Even the least expensive Honda offered a unique and fun driving experience, and the company's reputation for reliability was second to none. Honda had also established a record of technological innovation- such as the CVCC engine- that consumers embraced and that sent competitors back to the drawing boards.
The success Honda had enjoyed was emblematic of these changes. With the right product (the groundbreaking Civic) at the right time (the gas crisis of the early 70s), Honda sales growth had been phenomenal. Subsequent models such as the Accord and Prelude proved Honda had more than just good timing going for it. Following its philosophy of assembling cars where it sells them, Honda embarked on an ambitious plan to begin assembling cars in the United States and broke ground on a new plant in Ohio in 1980.
As work began on the Marysville, Ohio manufacturing plant, there were signs of change in the car market. The economy was improving, and luxury cars were starting to increase in sales volume. Manufacturers such as BMW, Mercedes-Benz and Audi captured the public's eye with aerodynamic designs that eschewed the chrome and excess of American luxury cars of the 1960s and 1970s. With a blend of luxury and performance, European manufacturers began to chip away at the high end of the market as America's middle class expanded and found themselves with more discretionary income than they could have dreamed of a few years earlier.
Many of these young professionals drove Honda cars when they were young, but as their income grew, Honda did not have a vehicle for them to move up to. Special Edition Accords featured leather seats, but even these limited-edition models couldn't qualify as a luxury car. Instead, Honda owners seeking bigger, more luxurious and more powerful cars were leaving Honda for Mercedes-Benz, BMW, Audi and other European luxury brands.
In 1981, Honda had a new, larger sedan in the early planning stages. It would be bigger than the Accord by a wide margin, feature the first Honda V-6 engine, and be loaded with luxury appointments. It would be sold not on the merits of its economy, but on its ability to thrill its driver. Honda executives viewed it as the perfect vehicle to keep upmarket intenders in the Honda family.
But there was a problem. While the buying public had accepted Japanese nameplates for their reliability and economy, luxury was another matter. Conventional wisdom said that an economy car manufacturer trying to take on the best from Europe was folly. However, Honda, more than any other car company, had found success by defying conventional wisdom.
Channel II
At the time that Honda was planning its move upmarket, there was little in its product lineup that foreshadowed success. With just three cars- the Civic, Accord and Prelude- it wasn't even a full line manufacturer. While popular with both the public and media, all of its cars were still clearly intended for the budget conscious. Prices were affordable, and even the most expensive Accord sold for well below $20,000. Basic luxury features, such as power windows and leather upholstery, were in short supply in Honda products. While nobody disputed that Honda built excellent vehicles, few thought it had the luxury credentials to compete with the likes of Europe's luxury brands.
The new Honda sedan, later to be named Legend, was known internally as the HX. Under the guidance of Tom Elliott, senior vice president of automobile operations, the HX would become the cornerstone of a luxury car division to compete with the likes of Volvo, BMW and others. The HX 24-valve fuel injected V-6 engine was powerful and sophisticated. Its independent suspension and four-wheel disc brakes promised the handling of a European sport sedan, but with the compliant ride expected of luxury car buyers. And it would boast equipment such as a premium stereo, air conditioning, anti-lock brakes and power accessories. It would also cost nearly $20,000, almost twice as much as the base price of an Accord in the early 80s.
The problem of selling such an expensive car through Honda dealerships was obvious. Not only would it overextend the already busy dealers (which sold on average 600 cars a year), customers would likely balk at the idea of such an expensive car wearing a Honda badge. Ultimately, Honda executives decided that the HX was simply too large and expensive to be sold alongside Civics. Instead, a new division would be created, one tailored to the needs and wants of luxury buyers. It would be entirely separate from Honda, with unique dealerships, first-class customer service and a sales experience that would be second to none. The Honda division would meet the needs of the mass market that shopped for value. The new division would cater to luxury and performance. Internally, the new division became known as Channel II.
The idea of launching the world's first Japanese luxury brand was a gamble. Launching it with only one vehicle- and an expensive one at that- was too risky, so another vehicle was needed to fit below the HX, but without diluting the luxury and performance image that Channel II would ultimately have. Luckily, a solution was found in the Japanese-market Quint-Integra. With a fuel-injected, twin-cam 16-valve four-cylinder engine, sophisticated chassis tuning and eye-catching style, the Integra, was designed to put premium sporty coupes such as the Volkswagen GTI on notice. Its style, technology and performance complemented the HX and the new division.
Later, there were plans for a third car, one that would take on one of the most prestigious and challenging markets in existence: exotic sports cars.
In February 1984, American Honda confirmed its upmarket intentions. Channel II had been the subject of much speculation by the media, and not all of it charitable. Some pundits regarded the idea of a Japanese luxury brand- especially one from a company known mostly for fuel-efficient transportation- as overreaching at best.
Despite media speculation, work continued. It was important to keep the new division as separate from Honda as possible. This meant new dealerships, new service and parts divisions, new sales and marketing...everything. Developing the sales network fell to Ed Taylor, assistant vice president of the new division. Honda boasted an image that appealed primarily to those looking to maximize their dollars. The new division was aimed at European luxury intenders. This meant that dealerships would have to extend a level of customer service expected by a luxury car buyer, and go beyond even that to convince buyers that they were buying more than just an expensive Honda. Paul Pugh, manager of auto field service, handled the creation of the new service network.
The new division needed a name, and the task of naming Channel II fell to Ira Bachrach's Namelab in San Francisco, Calif. The challenge was to create a name that would convey the image and style for which the upscale division would be known. And in September 1984, the new name was officially announced: Acura. The name was derived from "acu," a form from Latin, meaning mechanically precise or done with precision.
In November 1984, potential dealers were gathered for a secret meeting at the Anatole hotel in Dallas. American Honda executives Schmillen, Elliott, Taylor, Pugh and American Honda president Yoshihide Munekuni explained the dealership plan for the first time. The new dealerships had to be separate facilities from existing Honda dealerships, and couldn't even be adjacent to them. They would also have a distinct look and feel separate from that of Honda dealerships.
But there was more in store for the lucky few in attendance that day. For the first time, people outside Honda headquarters would see the HX and Integra. Reaction to the plan was mixed. While the cars themselves were universally well regarded, Honda was a popular brand, and some dealers thought that any car made by Honda should be available through Honda dealerships. However, many more saw the wisdom of separating the new cars into a new division with a new image.
When dealership selection began in February 1985, the criteria were strict. Potential dealers had to have the capital to afford the construction of a new dealership. Acura management insisted that they be located in key markets, such as Los Angeles, New York, Seattle and others around the country where luxury sales were strong.
Acura would introduce new technologies to existing Honda service managers, and Pugh established new service training centers in Los Angeles, Atlanta and New Jersey. Hired in September 1985, service managers had only a few months to master new Acura technology before the cars went on sale at the end of March 1986. And there was a lot of new technology to cover. Not only did Acura feature two completely new engines, including the company's first V-6, but electronic fuel injection, four-wheel disc brakes, double overhead cams and other new technologies would also be standard on all the cars.
As Taylor and Pugh established the dealer, sales and service networks, the newly formed Honda public relations department invited a select group of journalists to Japan for a first look at the cars in November 1985. At the Honda test track in Tochigi, select media were able to drive the Legend and Integra for the first time, and learn the difference between the Honda and Acura products.
The proof was in the driving. While some popular media still expressed skepticism about the viability of a Japanese luxury brand, Motor Trend disagreed, saying, "We think the odds of Acura's success are heavily in Honda's favor, for the Legend is a terrific debut automobile." Everyone who drove the Legend noted that the new sedan was not a copy of a European or American luxury car, nor was it a repeat of larger sedan models sold by Toyota and Nissan at the time. "It is, in truth, a new approach to the market," said Car and Driver. Praise was equally glowing for the Integra. "The Integra falls right into the hotbed of intriguing fun cars priced just a bit over $10,000, and we don't see how it can lose," said Car and Driver.
On March 27, 1986, the public finally got to see for themselves what the automotive media meant. When the first 60 Acura dealerships opened, it marked a turning point in the luxury car market. From that point on, luxury benchmarks would not automatically carry a European nameplate.
Torrance, CA - January 8, 2006 -- Acura History
As Acura celebrates its 20th anniversary, it stands as a leader in the luxury performance market with cars and trucks like the RL, TL, MDX and TSX. By combining technological innovation with world-class performance, contemporary design and luxurious appointments, Acura has captured the public's imagination.
The story of how Acura was created, launched and then grew into a major force in a competitive marketplace is a compelling testament not just to the company's products, but to the people who had the foresight to establish the first premium Japanese luxury car brand. History shows that Acura not only redefined the luxury car, it permanently changed the luxury marketplace from a slow evolution among a handful of brands to fierce competition between many. While today Japanese luxury brands are taken for granted, this was not the case in the early 1980s, when the groundbreaking Legend sedan was still on the drawing board.
The Plan
The early 1980s were a tumultuous time for the U.S. car market. Gas shortages, economic malaise and new government regulations in the 1970s caused an upheaval in the public's buying habits and the products available to the public changed dramatically. Small was big and Japanese manufacturers such as Honda had forged reputations of reliability, economical operation and low price that were the envy of many competitors. Even the least expensive Honda offered a unique and fun driving experience, and the company's reputation for reliability was second to none. Honda had also established a record of technological innovation- such as the CVCC engine- that consumers embraced and that sent competitors back to the drawing boards.
The success Honda had enjoyed was emblematic of these changes. With the right product (the groundbreaking Civic) at the right time (the gas crisis of the early 70s), Honda sales growth had been phenomenal. Subsequent models such as the Accord and Prelude proved Honda had more than just good timing going for it. Following its philosophy of assembling cars where it sells them, Honda embarked on an ambitious plan to begin assembling cars in the United States and broke ground on a new plant in Ohio in 1980.
As work began on the Marysville, Ohio manufacturing plant, there were signs of change in the car market. The economy was improving, and luxury cars were starting to increase in sales volume. Manufacturers such as BMW, Mercedes-Benz and Audi captured the public's eye with aerodynamic designs that eschewed the chrome and excess of American luxury cars of the 1960s and 1970s. With a blend of luxury and performance, European manufacturers began to chip away at the high end of the market as America's middle class expanded and found themselves with more discretionary income than they could have dreamed of a few years earlier.
Many of these young professionals drove Honda cars when they were young, but as their income grew, Honda did not have a vehicle for them to move up to. Special Edition Accords featured leather seats, but even these limited-edition models couldn't qualify as a luxury car. Instead, Honda owners seeking bigger, more luxurious and more powerful cars were leaving Honda for Mercedes-Benz, BMW, Audi and other European luxury brands.
In 1981, Honda had a new, larger sedan in the early planning stages. It would be bigger than the Accord by a wide margin, feature the first Honda V-6 engine, and be loaded with luxury appointments. It would be sold not on the merits of its economy, but on its ability to thrill its driver. Honda executives viewed it as the perfect vehicle to keep upmarket intenders in the Honda family.
But there was a problem. While the buying public had accepted Japanese nameplates for their reliability and economy, luxury was another matter. Conventional wisdom said that an economy car manufacturer trying to take on the best from Europe was folly. However, Honda, more than any other car company, had found success by defying conventional wisdom.
Channel II
At the time that Honda was planning its move upmarket, there was little in its product lineup that foreshadowed success. With just three cars- the Civic, Accord and Prelude- it wasn't even a full line manufacturer. While popular with both the public and media, all of its cars were still clearly intended for the budget conscious. Prices were affordable, and even the most expensive Accord sold for well below $20,000. Basic luxury features, such as power windows and leather upholstery, were in short supply in Honda products. While nobody disputed that Honda built excellent vehicles, few thought it had the luxury credentials to compete with the likes of Europe's luxury brands.
The new Honda sedan, later to be named Legend, was known internally as the HX. Under the guidance of Tom Elliott, senior vice president of automobile operations, the HX would become the cornerstone of a luxury car division to compete with the likes of Volvo, BMW and others. The HX 24-valve fuel injected V-6 engine was powerful and sophisticated. Its independent suspension and four-wheel disc brakes promised the handling of a European sport sedan, but with the compliant ride expected of luxury car buyers. And it would boast equipment such as a premium stereo, air conditioning, anti-lock brakes and power accessories. It would also cost nearly $20,000, almost twice as much as the base price of an Accord in the early 80s.
The problem of selling such an expensive car through Honda dealerships was obvious. Not only would it overextend the already busy dealers (which sold on average 600 cars a year), customers would likely balk at the idea of such an expensive car wearing a Honda badge. Ultimately, Honda executives decided that the HX was simply too large and expensive to be sold alongside Civics. Instead, a new division would be created, one tailored to the needs and wants of luxury buyers. It would be entirely separate from Honda, with unique dealerships, first-class customer service and a sales experience that would be second to none. The Honda division would meet the needs of the mass market that shopped for value. The new division would cater to luxury and performance. Internally, the new division became known as Channel II.
The idea of launching the world's first Japanese luxury brand was a gamble. Launching it with only one vehicle- and an expensive one at that- was too risky, so another vehicle was needed to fit below the HX, but without diluting the luxury and performance image that Channel II would ultimately have. Luckily, a solution was found in the Japanese-market Quint-Integra. With a fuel-injected, twin-cam 16-valve four-cylinder engine, sophisticated chassis tuning and eye-catching style, the Integra, was designed to put premium sporty coupes such as the Volkswagen GTI on notice. Its style, technology and performance complemented the HX and the new division.
Later, there were plans for a third car, one that would take on one of the most prestigious and challenging markets in existence: exotic sports cars.
In February 1984, American Honda confirmed its upmarket intentions. Channel II had been the subject of much speculation by the media, and not all of it charitable. Some pundits regarded the idea of a Japanese luxury brand- especially one from a company known mostly for fuel-efficient transportation- as overreaching at best.
Despite media speculation, work continued. It was important to keep the new division as separate from Honda as possible. This meant new dealerships, new service and parts divisions, new sales and marketing...everything. Developing the sales network fell to Ed Taylor, assistant vice president of the new division. Honda boasted an image that appealed primarily to those looking to maximize their dollars. The new division was aimed at European luxury intenders. This meant that dealerships would have to extend a level of customer service expected by a luxury car buyer, and go beyond even that to convince buyers that they were buying more than just an expensive Honda. Paul Pugh, manager of auto field service, handled the creation of the new service network.
The new division needed a name, and the task of naming Channel II fell to Ira Bachrach's Namelab in San Francisco, Calif. The challenge was to create a name that would convey the image and style for which the upscale division would be known. And in September 1984, the new name was officially announced: Acura. The name was derived from "acu," a form from Latin, meaning mechanically precise or done with precision.
In November 1984, potential dealers were gathered for a secret meeting at the Anatole hotel in Dallas. American Honda executives Schmillen, Elliott, Taylor, Pugh and American Honda president Yoshihide Munekuni explained the dealership plan for the first time. The new dealerships had to be separate facilities from existing Honda dealerships, and couldn't even be adjacent to them. They would also have a distinct look and feel separate from that of Honda dealerships.
But there was more in store for the lucky few in attendance that day. For the first time, people outside Honda headquarters would see the HX and Integra. Reaction to the plan was mixed. While the cars themselves were universally well regarded, Honda was a popular brand, and some dealers thought that any car made by Honda should be available through Honda dealerships. However, many more saw the wisdom of separating the new cars into a new division with a new image.
When dealership selection began in February 1985, the criteria were strict. Potential dealers had to have the capital to afford the construction of a new dealership. Acura management insisted that they be located in key markets, such as Los Angeles, New York, Seattle and others around the country where luxury sales were strong.
Acura would introduce new technologies to existing Honda service managers, and Pugh established new service training centers in Los Angeles, Atlanta and New Jersey. Hired in September 1985, service managers had only a few months to master new Acura technology before the cars went on sale at the end of March 1986. And there was a lot of new technology to cover. Not only did Acura feature two completely new engines, including the company's first V-6, but electronic fuel injection, four-wheel disc brakes, double overhead cams and other new technologies would also be standard on all the cars.
As Taylor and Pugh established the dealer, sales and service networks, the newly formed Honda public relations department invited a select group of journalists to Japan for a first look at the cars in November 1985. At the Honda test track in Tochigi, select media were able to drive the Legend and Integra for the first time, and learn the difference between the Honda and Acura products.
The proof was in the driving. While some popular media still expressed skepticism about the viability of a Japanese luxury brand, Motor Trend disagreed, saying, "We think the odds of Acura's success are heavily in Honda's favor, for the Legend is a terrific debut automobile." Everyone who drove the Legend noted that the new sedan was not a copy of a European or American luxury car, nor was it a repeat of larger sedan models sold by Toyota and Nissan at the time. "It is, in truth, a new approach to the market," said Car and Driver. Praise was equally glowing for the Integra. "The Integra falls right into the hotbed of intriguing fun cars priced just a bit over $10,000, and we don't see how it can lose," said Car and Driver.
On March 27, 1986, the public finally got to see for themselves what the automotive media meant. When the first 60 Acura dealerships opened, it marked a turning point in the luxury car market. From that point on, luxury benchmarks would not automatically carry a European nameplate.
