REVIEW DATE: 12 Feb 2008
Honda has an ambition to supply one out of every ten cars purchased by a user chooser. To do that, it has to take on the Germanic brands that dominate this segment. Can the Civic diesel we've been running long term cut the mustard against the likes of the VW Golf and the Audi A3? Andy Enright reports
Radically improving a car is relatively easy. Changing public perception is a whole different matter. Honda is in the process of repositioning itself from a commodity manufacturer to one whose products are a notch or two above the mainstream. That's the aspiration at least, but while the products are all falling into place nicely, is the brand strong enough to sustain this premium approach? We asked some sample customers whether they thought our long term Civic 2.2 i-CTDi held its own against typical premium rivals.
Even as recently as four years ago, if asked to name the Civic's rivals, anybody in the know would have identified cars such as the Ford Focus, the Peugeot 307, the Toyota Corolla and the Renault Megane. It was only with the launch of the latest Accord in 2002 that it became apparent that Honda was looking for bigger fish to fry. This car marked a departure from the company's previous mainstream approach. When the sixth generation Accord was launched, the reedy, rather two-dimensional feel of previous Accord models was consigned to history. Honda had built a heavyweight contender. In order to reinforce the premium feel, Honda ditched the budget engines, giving the Accord a heftier lead-in price than mainstream offerings. The fact that the 2.0-litre and 2.4-litre models were still much the same price as an equivalent Vectra or Mondeo was by the by. The seed was sown in the public's mind that the Accord was a more prestigious piece of machinery.
This ground work is paying off with the Civic. Buoyed by a series of highly acclaimed advertisements charged with building Honda's brand recognition, the Civic is a far more radical proposition than the Accord and, as such, marked a real gamble on Honda's part. Given that the average Civic buyer was well into their forties prior to the introduction of the latest model, the adventurous styling ran the risk of alienating existing customers. In order to achieve their ends, Honda were willing to take those odds and so far, the results are promising. The Civic petrol was the biggest retail seller in its category in February 2006, yet residual values remained strong. The retail sector is always an important indicator of a car's relative desirability and the Civic had passed its first test. The acid test was whether company car user choosers who had the choice of a Honda or an Audi or a Golf would turn their back on the Vaterland.
"The impossible Honda can usually achieve, but miracles take a little longer."
Status counts for a lot here. Company car buyers have traditionally valued brand equity, often favouring base models of premium brands over well-equipped mainstream alternatives. One only has to look at the rise in sales of compact executive models over traditional company fare like Mondeos, 407s and Vectras to see what Honda are up against. In 1996 this sector of the market accounted for 24.6% of UK sales. By 2005 it had shrunk to just 17.5%. Ford built half as many Mondeos in 2005 as it did as recently as 2001. These days, the BMW 3 Series outsells the Vauxhall Vectra and cars like the VW Passat and Audi A4 register more sales than the Peugeot 407 or the Renault Laguna. Badge equity is vital and Honda still has some work to do.
We interviewed a focus group of six owners who had either bought Volkswagen Golfs and Audi A3s privately or selected them as company cars. The aim was to discover whether they felt the Civic represented a viable alternative. All were impressed by the car's innovation, the fact that it offered more equipment for the money and, surprisingly, that it was a better drive than their Golf or A3. Some experts have carped about the fact that the Civic has reverted to a torsion beam rear suspension from a fully-independent system, complaining that this is a retrograde engineering step given Honda's technical acumen, but none of our target group complained about this. In fact, all but one of the respondent's felt the Civic's ride and handling to be superior to the German cars.
It certainly trumps them in terms of value for money. If you've been granted a £20,000 budget, it's not going to get a whole lot of Audi A3 diesel. The 1.9-litre engine is too old and rough to bother with and the only 2.0-litre option under the budget is the base model. With the same 138bhp power output as the Honda, you'll have to live without the dual zone climate control, the refrigerated glove box, cruise control, rain sensing wipers, front fog lights, DVD sat nav and even something as basic as a stereo that plays CDs is extra. By contrast, a Civic 2.2 i-CTDi EX includes all this kit. You'll even be able to specify the optional leather interior, panoramic glass roof and metallic paint and still get change from £20,000. It's worth making the point, however, that the most unreconstructed badge snobs will drive around in a car as poorly appointed as a Bulgarian thrift store if the insignia on the front is right.
That's Honda's challenge and the signs are it's winning the battle. After a drive in our well-specified Civic, four out of the six respondents reckoned they'd choose Honda next time over their German alternative. One would never budge, feeling that, if anything, he was looking to trade up to a Mercedes or a BMW model while the other was undecided and professed to know little about cars. This is a real factor. Many customers choose the German brands because they're afraid of making what might be perceived as the 'wrong' buying decision amongst peers and, lacking in-depth product knowledge, plump for the safe option.
If Honda can get potential customers into Civics, they'll convert them to sales. The product speaks for itself. Where the challenge lays is in getting typical Audi and Volkswagen customers into a Honda dealership in the first instance. Perceptions are changing and it's not going to happen overnight but it would be a brave analyst who would bet against the company achieving that goal in the medium term. The impossible Honda can usually achieve, but miracles take a little longer.
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