In 2024, Honda’s luxury car brand Acura is expected to launch its first electric vehicle in the market. However, customers won’t be able to walk into an Acura dealership, ask for one, and then drive away in it.
“Acura will serve as the tip of the spear for digitalization at American Honda, with 100% of Acura EV sales taking place online, starting in 2024.”
Acura
Yesterday, during a briefing for media people on the company’s initiatives for the year 2023, Mamadou Diallo, VP of auto sales for Honda and Acura, announced the move.
When asked whether this meant that the prices of the cars would be set and there would be no room for negotiation, Diallo stated that the details “are still being worked out.”
First EV to bring back ZDX name
The company disclosed that pre-orders for Acura’s first electric vehicle will begin to be taken “ahead of the early 2024 release” before 2023 ends. This new model will be known as the Acura ZDX in 2024, giving new life to an old moniker.
Diallo also claims the ZDX will be a high-performance Type S model and ride on the same platform as the upcoming Honda Prologue SUV.
Acura provided a sneak peek at the potential design of the ZDX at the tail end of 2017 with the reveal of its Precision EV Concept.
In terms of total EV sales, Tesla has a significant lead. Its Model Y SUV and Model 3 sedan are currently the two best-selling electric vehicles in the world.
All of this is accomplished by Tesla without using conventional dealerships. Most automakers sell their products to customers through independent dealerships they do not own or manage directly.
These dealerships buy cars directly from the automakers and then sell them to customers, bargaining the price of each vehicle with each customer.
However, Tesla does not collaborate with any outside parties.
US auto market
The United States is one massive automobile market, but individual states are responsible for regulating sales. Therefore, the automotive industry follows fifty different sets of regulations.
Some states let automakers run their car dealers directly. In all those states, Tesla stores are independently operated.
Others enable automakers to run information center storefronts where consumers can see the vehicles but are not permitted to purchase one.
Tesla has “galleries” in those states, but the workers send customers home so they can place their orders online.
Even carrying out that activity is against the law in a few states. Customers can order a Tesla and ship the vehicle to them, but the company does not operate physical retail locations.
As a result of this complicated situation, Tesla owners in certain states need quick access to local service and repair. But this also means that Tesla does not share its profits with its sales partners.
Every single penny that is made goes straight into the company’s coffers. It is so profitable that it recently reduced prices on some cars by up to 20%, a move that most automakers cannot afford to respond to.
Challenges for automakers
Tesla models present a challenge to traditional automakers. They can reassure purchasers of large dealership networks staffed by knowledgeable employees in every state.
However, they are required to split the profits with the dealerships. Suppose a dealership participates in questionable sales practices. In that case, it casts a negative light on the automaker, even if the automaker can’t do much to prevent it or stop it from happening in the first place.
Kelly Blue Book reports that traditional automakers must learn how to respond to Tesla’s strategy. Acura may be one of the pioneers in attempting something brand new.
Ford’s CEO spent a significant portion of the last two years publicly musing about the possibility of the company adopting a sales model more akin to that of Tesla.
After that, he consented to withdraw that choice from consideration on the condition that dealers consented to sell electric vehicles at predetermined prices and install electric vehicle chargers in their showrooms.
Acura’s plan
Diallo refused to comment on whether or not Acura would offer the ZDX at a predetermined price.
“Our dealers are fully onboard. They’ve been involved. They understand we’re trying to address customer convenience and what that transaction might look like in the future.”
Mamadou Diallo, VP of auto sales for Honda and Acura
He further noted that dealerships would have the ZDX in stock for prospective purchasers to view and test drive.
“Whether the process starts in your living room or starts at your dealership where someone wants to touch and feel a car on the showroom floor, our dealers will still be part of that.”
Mamadou Diallo, VP of auto sales for Honda and Acura
On the other hand, purchasers will finish their business online.
See Also:
- Tesla snatches “US luxury crown” from former King BMW
- US: Tesla led the luxury car segment in 2022
- Honda CEO’s reservations on simulated manual transmissions for EVs
- Honda and LG confirm Ohio as the location for a $4.4 billion battery plant
- Honda Exec says Solid-state batteries could be a game changer, not Lithium-ion
