The Accord has been Honda's (NYSE:HMC) best-selling U.S. model, accounting for a quarter of its sales volume in the country in 2014 through August. A decade back, an Accord or a Toyota (NYSE:TM) Camry were the default options for buyers of midsize family sedans. But things have changed dramatically over the years as the American auto market is crowding up with competitive offerings. Honda's putting in all the effort required to steer past the competition, and recently, Accord sales have skyrocketed. Let's take a look at Accord's U.S. journey and what's driving its current success.
Then and now
In 1976, Honda launched the Accord in the U.S. market. As the Asian automaker had already established a good name in the U.S. with the highly admired Civic, the stage was already set for the Accord. Honda had sensed Americans' need for economical cars as fuel prices were soaring. The wallet-friendly Accord came in as a high-quality offering with smooth mechanics and excellent mileage. The car, which was initially introduced as a three-door hatchback, became a smash hit with critics and buyers almost immediately. With every subsequent revamp, Honda enhanced the size, looks, and power, and added fresh features to the car while keeping the basics intact.
The contention between Honda Accord and Toyota Camry is one of those classic never-ending battles. In the 1990s, Accord and Camry started outselling American cars. Honda managed to tighten its rein on the market, maintaining its sales lead until 1997, after which Camry took over. Accord regained the top position in 2001, but since 2002, Camry's been sitting pretty on the throne. This doesn't mean that Accord's popularity has been dented, however. Sales volume in recent years is slowly approaching pre-recession levels.
Accords are in heavy demand
How much Accord means to Honda's performance is no secret -- in 2013, Accord made up 24% of the company's total U.S. sales volume, and this year through August, the sedan has made up 26% of the total. Last month the company sold 51,075 Accords, an all-time monthly record for the car. The sales number is up by a staggering 33% over the same period last year. Camry, on the other hand, saw sales of 44,043 units in August. Accord and Camry have registered growth of 6.7% and 5.6%, respectively, through August in 2014 compared to the year-ago period. Accord's success is a very positive development for Honda, as it's facing falling sales volumes in the U.S. In the first eight months of the year, the company's total deliveries were down by 1%.
Honda's focusing on strategies to boost "retail sales to individual buyers." Like many of its peers in the midsize segment, it's stepped up incentives on the Accord to attract buyers. According to Edmunds analyst Jessica Caldwell, the recent sales surge of the Honda Accord, Ford Fusion and Nissan Altima is largely due to the discounts that are attracting owners of older models. As she told the Washington Post, "All of those vehicles have pretty large customer bases. They see some of the deals that are out there." According to calculations from Edmunds, Honda offered an incentive of $2,013 per Accord in August, triple the amount it offered at the same time last year. Altima incentives were $2,293 per unit in August, and Fusion's, $2,774.
The 2015 Accord has more to offer
To give sales a further boost, Honda launched the refurbished 2015 Accord, which hit stores at the end of August. The 2015 Accord will take on the brand-new 2015 Camry that rolls out in dealerships by month's end. With the 2015 Accord sedan, coupe, and hybrid versions, Honda expects to be at its competitive best.
The sedan and coupe come with the V6 engine, as well as handy features such as the HomeLink Wireless Control that can operate up to three devices in or around one's home, like the garage doors, home security system, or lighting. The third model, which is a hybrid version, has a starting price of $29,305. The superior Intelligent Multi-Mode Drive (i-MMD), which offers three discrete driving modes -- an EV drive, a hybrid drive, and the engine drive -- is the highlight of this car. The i-MMD is powered by a two-motor hybrid system that facilitates a smooth transition between the driving modes. Though competition is growing, it's clear that Honda's working hard to create cars that are a step ahead of other offerings.
Foolish bottom line
What the Camry is to Toyota, the Accord is to Honda. Accord might not have dethroned Camry, but it's not letting the category topper rest easy, instead following close behind with cutting-edge upgrades. The 2015 Accord could give sales a further boost. Honda has a finger on the pulse of the market and is customizing progressive models to suit the preferences of its U.S. buyers, while at the same time offering cool deals to keep the sales momentum alive.
ICRA Online and Eshna Basu have no position in any stocks mentioned. The Motley Fool recommends BMW, Ford, and Nike. The Motley Fool owns shares of Ford and Nike. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.