In June, Honda launched the 2012 Honda Civic after postponing the original launch due to quake-related supply shortages. The launch was much-anticipated as six years had elapsed since the last redesign, and only three months since the devastating Japan earthquake and tsunami that significantly disrupted production. But the segment has evolved significantly in six years, driven by the Elantra, Focus, and Cruze. Given the importance of the Civic to the market and Honda, Compete assessed Civic’s launch to date on several measures. So far results are atypical for a Honda launch on several measures.
Compete compared 2011 YTD performance of the Civic against the Elantra, Focus, and Cruze. The comparison leverages Compete’s proprietary in-market automotive shopper metrics, which are based on unique consumers (i.e., no double-counting of consumers doing the same activity more than once in the same month). Those metrics in turn leverage Compete’s patented normalization technology. We also included relevant original survey results.
Shopper Volume: After remaining steady at approximately 90,000 shoppers from February to May, Civic shopper volume increased substantially in June to 119,000 shoppers in the midst of its launch (see chart below).
In June, Civic was the most shopped model market-wide. That’s clearly a key measure of success and the spike in shopper volume suggests Honda supported the launch with significant advertising. However, the spike was surprisingly short-lived as shopper volume declined quickly and sharply to approximately 107,000 shoppers in July and 85,000 in August. The brevity is atypical for Honda in particular.
Reverse Cross-Shop: Capturing the interest of rivals’ in-market shoppers is crucial to sustain demand once launch spend ends. Reverse cross-shop helps measure a model’s ability to do that. To set the stage for Civic’s post-launch success, Compete examined cross-shopping of Civic among Elantra, Focus, and Cruze shoppers for 2011 YTD (see chart below).
Through May, average Civic reverse cross-shop interest was 12% (not shown). That means, for the first five months of the year an average of 12% of Elantra, Focus, and Cruze shoppers also shopped the Civic. In June, average reverse cross-shop interest for the Civic spiked to 17%. The spike in June was to be expected as advertising by Honda made the Civic a top of mind model for in-market segment shoppers. However, average reverse cross-shop interest for the Civic in July fell to 15% and then again to 13% in August, supporting the overall demand decline.
Consumer Opinion: Atypically, the 2012 Civic has been challenged by negative publicity, including Consumer Reports dropping Civic’s longstanding “recommended” status in July and a recall from a fuel leak. To help inform the impact of this effect, Compete surveyed its online panel to understand the value that different sources of information have on their new vehicle purchase intentions.
Overall, consumers value Personal Experience the most (“extremely valuable’ at 58%), followed by MPG Data (33%). Rating Services are third, with 30% reporting “extremely valuable”. These results suggest that the downgrade by Consumer Reports may have adversely impacted consumers’ willingness to shop Civic.
Civic Duty: Civic’s launch to date has hit some potholes: a short shopper lift, low sustained reverse cross-shop, and a ding from a key rating agency. As Compete continues to track Civic we’ll be watching for the following:
- Was the June Civic launch the full launch? For example, did Honda only briefly advertise while supplies were still tight?
- Related, will there be a Civic launch, Part 2, in which Honda supports Civic for a longer period and with more aggressive funding?
- Was Civic’s recent ad spend cost-effective vs. other Honda launches and recent launches by rivals? This can be measured by comparing each model’s cost per shopper (ad spend by month divided by shoppers that same month).
- Does Honda have enough Civic shoppers to meet sales goals without having to ratchet up incentives?
Tom Lucido is a Sr. Associate at Compete. At Compete, Tom is responsible for client deliverable management for the automotive team. Before Tom joined the Compete Team he worked at J.D. Power and Associates on the production and delivery of Auto Finance and Banking customer satisfaction studies and advisory projects. Connect with Tom on LinkedIn