Honda (NYSE:HMC) this week unveiled the 2016 Civic, an all-new model that it hopes will revive its flagging sedan sales in the United States.
Sales of the current Civic have fallen 4% this year through August, as more buyers are choosing compact "crossover" SUVs instead. But the Civic is an important model for Honda all around the world. Will the new version give Honda's sales a boost?
Honda badly needed a new and better Civic
This is the 10th generation of Honda's Civic and the company says it's "the most ambitious remake of Civic ever." But what does that mean?
Civics have always been a great choice for buyers who want simple, reliable transportation. But this time around, Honda put a lot of effort into making the new Civic not just simple and (hopefully) reliable, but also nice, a little more like a luxury car.
That's a much-needed move. The outgoing Civic delivered on the traditional Civic virtues, but that wasn't enough. Honda's reliability record used to be much better than most of its rivals' and that used to be a huge selling point -- but big competitors like General Motors have largely closed the gap.
That made the somewhat spartan Civic a harder sell against competitors' models that are more plush, or more fun to drive, or both. Ford's Focus and Hyundai's Elantra both out-classed it right from the start, putting Honda in an unaccustomed position in the compact-car segment: also-ran.
Honda thinks the new Civic will change all that.
A big effort to create a more premium car
The new Civic certainly has more dramatic styling than Civics of old. It looks sporty -- and it looks more like a premium product than Civics traditionally have. Honda put a lot of emphasis on "refinement" -- things like ride quality and noise reduction that help win buyers on test drives -- with major changes to the Civic's structure and suspension.
The 2016 Civic will be available with a choice of two all-new engines. There's a 2-liter four-cylinder that Honda says is the most powerful base engine ever offered on a Civic. Premium models get a 1.5-liter four-cylinder that's turbocharged -- Honda's first-ever turbo in the United States.
Honda says that it expects Civics with both engines to get an EPA highway fuel-economy rating over 40 miles per gallon -- while offering what it says is "top-in-class" performance.
Inside, Honda has stepped up its effort, with improved materials and a more premium feel. Drivers sit lower than in the outgoing car, for a sporty feel, and there's more legroom in back -- 2 inches more than the current car, Honda says. Following the example of rivals like Ford and GM, Honda is offering more luxury features than ever on the Civic, with automatic climate control standard on all models and a long list of optional luxury features.
Those options include a new 7-inch high-definition touchscreen system that includes both CarPlay and Android Auto for easy smartphone integration. Honda is also offering several new driver-assistance technologies, including adaptive cruise control -- something never before seen on a Honda in the U.S.
The upshot: This looks like the right move for Honda
It might seem a little illogical to be launching a new compact car at a moment when car sales are slumping. But compacts still draw significant sales and Honda's Civic is a bedrock product.
On paper at least, the new Civic makes a big move in the right direction. Reliable basic transportation doesn't cut it anymore. Even at the Civic's price point, buyers nowadays are looking for a premium ride and advanced features -- and finding them in many of the Civic's rivals.
Honda still has a great reputation for quality and value, and that still draws buyers to its showrooms. If the new Civic can deliver more of a fun-to-drive experience along with a premium feel -- together with its traditional virtues -- it should do very well.
John Rosevear owns, and The Motley Fool recommends, Ford and General Motors. 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.