Posted by: David Kiley on June 5, 2007
The cancellation of the Honda Accord hybrid by the Japanese automaker announced this week should be recorded as one of the most spectacular marketing failures of the last five years.
Honda announced that the new Accord, due out next year, won’t have a hybrid version. The announcement confirmed a story in Businessweek.com last January. The reason is simple. The one it has been trying to sell has been a flop. But why? In the current environment, not being able to sell a gas-electric hybrid takes real talent and effort. The Toyota Prius has sold 77,000 in the U.S. in just the first five months of they year. Honda, meantime, has sold 1,700 Accord hybrids and 13,900 Civic hybrids. Ford has sold just 9,252 Escape hybrids.
The Accord Hybrid features the company’s third-generation electric assist drive-train matched with a modified version of the V6 that has cylinder deactivation technology. With 253 hp and 232 lb-ft of torque, it’s the most powerful Accord in the lineup. The hybrid system captures electrical energy during braking or deceleration and stores it in the vehicle’s special battery pack.. Also, the system features the ability to shut off the engine during vehicle stops for further efficiency gains. The car’s fuel economy is rated at 28 mpg city/35 mpg highway, which is similar to the fuel economy of the standard for-cylinder Accord.
A couple of things. The engineers at Honda got carried away with rational thinking. They talked themselves into the idea that a load of people would be impressed with getting four cylinder fuel economy with six cylinder power. Not so much. The typical Accord buyer is not that interested in horsepower. And to pay $9,000 more for the hybrid than the four-cylinder made sense to very few customers. Honda, in fact, is now discounting the Accord hybrid at $28,844, compared with an MSRP of $31,685, according to Edmunds.com
Honda thought that the car would sell itself since it gets so much sales and showroom traffic for Accord sales anyway. The Accord has been the second best selling passenger car in the U.S. for some time. That’s just lazy thinking. C’mon. Not being able to sell a gas-electric hybrid in today’s gas-price and global warming environment is like not being able to sell beer at a Bears game.
Honda, Toyota, Ford and Saturn have all been making the same mistake when it comes to selling hybrids. It’s the “doy” factory, as I call it. Toyota established the marketing model, yet no one seems prepared to follow it. Toyota gave the Prius a unique design and a unique name. Those things gave the gas-electric hybrid buyers the identity with the hybrid and doing good and green that they are looking for. The Prius is a badge for driving green like a BMW is a badge for success and a Ford F150 stands for Texas toughness.
Ford and GM have both followed the Accord hybrid strategy instead of the Prius strategy. The Ford Escape hybrid is barely distinguishable from the gas version. Saturn has the Vue Green Line hybrid, but the GM division didn’t go far enough to set it apart from the standard Vue. Saturn is coming to market with the Aura hybrid, and Ford is following with the Fusion hybrid.
Why they are following the Accord hybrid marketing model, and not the Prius model is beyond me. It’s like asking why Ford was so intent on rolling up busted premium brands like Jaguar, Land Rover and Volvo instead of cooking up a new brand with no baggage the way Toyota did with Lexus.
Honda did no discernible marketing or public relations promotion for the Accord hybrid. It’s not easy distinguishing any of the hybrids in the market today from the Toyota Prius. But this was a disaster. Honda needs to review all of its marketing. There was a time when Honda did sensational, sharply executed, artful advertising in the U.S. It’s been about a decade since I have seen that. Honda holds its own in sales and profit. But it is taking an unnecessary drubbing from Toyota, which has dramatically out-performed Honda on profits, marketing and PR, and overall market momentum. Honda, simply put, needs to put a jolt of electricity into its whole marketing effort.