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Honda runs Super Bowl ads in U.S.

Feb. 5, 2012 - 21:51 By Korea Herald
Honda Motor Co., coming off its worst year in the U.S., has produced two offbeat Super Bowl ads with stars Matthew Broderick and Jerry Seinfeld to revive interest in its brands.

Honda will air the two 60-second spots during Feb. 5’s Super Bowl after sitting out last year’s game. A commercial promoting its CR-V crossover has actor Broderick behaving like his character in 1986’s “Ferris Bueller’s Day Off.” An Acura ad has car collectors Seinfeld and “Tonight Show” host Jay Leno competing for the first NSX supercar.

Honda is counting on the ad campaign to help it wage a comeback in the U.S. market, where its share fell to 9 percent in 2011 from 10.6 percent the year before due to natural disasters in Asia as well as critical reviews for its Civic compact. The carmaker is looking to replenished dealer supplies and revamped models such as the CR-V and mid-size Accord to fuel a 27 percent U.S. sales increase in 2012.

“What we wanted to do with these Super Bowl spots is announce Honda and Acura are open for business,” Mike Accavitti, Honda’s vice president of U.S. marketing, said in an interview.

Market share gains by Hyundai Motor Co. (005380), Volkswagen AG (VOW) and Ford Motor Co., which have improved their compact and mid-size cars mean Honda can’t coast on its reputation, said Brad Adgate, head of research at New York-based Horizon Media Inc.

“When you think of Honda, you still think of well-built cars, but brands like Hyundai seem to have promoted themselves much more heavily,” Adgate said. “It’s not that Honda has to reinvent the brand image, but they need to take a page from Hyundai and some others and ramp it up a little.”

Recent marketing efforts by Honda have been “unimaginative and forgettable,” said Jim Hall, principal of 2953 Analytics Inc., an auto consultant in Birmingham, Michigan.

U.S. sales success for Honda’s Accord and Civic models stretching back to the 1980s meant the Tokyo-based company didn’t have to work hard to promote its products, Hall said. “They got by selling on word of mouth.”

Improvement in the quality, designs and technology of competitors’ vehicles have eliminated Honda’s advantages, Hall said.

“The company has been getting by on its lingering high brand value,” Hall said. “That’s inertia.”

Accavitti, who joined Honda last year after working previously for Chrysler Group LLC, won’t be able to change Honda’s circumstances in the U.S. with advertising unless top management in Japan recognizes how much better competitors have become, Hall said.

Honda’s American depositary receipts fell 0.2 percent to $35.60 at the close in New York. They’ve gained 17 percent this year.

Brand Value

Honda’s sales plunged 6.8 percent last year while total U.S. vehicle deliveries grew 10 percent. Natural disasters in Japan and Thailand brought production delays at the company’s plants, leaving Honda short of vehicles to sell.

Honda, reliant on the U.S. for the biggest portion of its global sales, reported a 2.5 percent decline in North American revenue for the quarter that ended Dec. 31, and 21 percent drop in regional sales in the first three quarters of its fiscal year than ends March 31.

Honda President Takanobu Ito told reporters at the Detroit auto show last month that 2011 had been the company’s worst in the U.S.

“It was like we were jinxed,” Ito said.

A redesigned version of the Civic compact also drew an unfavorable review last August by Consumer Reports, a magazine that historically favored most Honda and Acura vehicles. The review contrasted Civic with Hyundai’s Elantra, which is among the small cars the publication currently prefers.

The Honda brand, after its travails, remains among the highest rated by consumers, according to Strategic Vision Inc., a market-research company in San Diego.

In 2011, 37 percent of consumers considering buying a vehicle would “definitely consider” a Honda, according to Strategic Vision, which annually surveys about 300,000 adults.

Only Toyota Motor Corp. (7203)’s Toyota brand ranks ahead of Honda, with 41 percent of people surveyed by Strategic Vision saying they would “definitely consider” a Toyota model.

The company reported an 8.8 percent sales gain in January, its first such increase after eight consecutive monthly declines. A 50 percent sales surge for Civic led the improvement.

Among automakers, Honda ranked fifth in ad expenditures last year. Honda spent $642.2 million for U.S. advertising from January through November 2011, the latest period for which data are available, according to Kantar Media.

In the same period, General Motors Co. spent $1.55 billion; Chrysler followed at $1.07 billion; Toyota spent $996.2 million; and Ford (F) spent $949.4 million. Hyundai was sixth in ad spending at $609.1 million, according to Kantar.

Honda’s marketing budget is higher this year, Accavitti said, without elaborating.

“We’ll have the resources we need,” he said. The executive is based in Torrance, California, where Honda has its U.S. headquarters.