I wasn’t all that impressed by the all-new 2012 Honda Civic during a recent test drive, and it seems pretty clear that many potential customers share my opinion. Sales of the car were down 26.4 percent last month, and this can’t be pinned solely on Honda’s struggles to get back on track after the spring disasters in Japan or, at this stage, low supplies as production of the car ramps up. More significant right now is the overall industry momentum on the truck side of the business. While there’s no getting around the Civic’s disappointing sales numbers or the fact that Honda Accord sales continued to evaporate last month, with another 13.8 percent year-over-year drop in deliveries, you can see the company’s key crossover were both in the black. The Honda Pilot rang up a 27.9 percent sales jump in the previous month, with the Honda CR-V—despite being right at the end of its life cycle—netted a monthly sales gain of 9.5 percent.
On ye olde other hand, while one might expect sales of the new Civic to slip in this kind of industry environment, who’d have thunk they’d fall twice as fast as the Accord’s did last month?
Plus, the Civic’s sales retreat was the worst of any mainstream compact. Two notable vehicles, the Toyota Corolla and Ford Focus, were close to the Honda’s mark, with sales slipping by 23.3 percent for the former and 24.1 percent for the latter, but both members of this pair are dragging along the kind of burdens the Civic doesn’t have to deal with. The Corolla is simply an old car battling against much newer rivals, and the Focus is dealing with growing fallout from owners unhappy with its PowerShift transmission and MyFord Touch system.
But there also may be another interesting-ish reason behind the Civic’s recent performance—according to data from CNW Marketing, a surprising number of customers are cross-shopping it against midsize sedans.
Let’s take a quick peek behind marketers efforts to take a peek behind customer behaviors in the auto industry: For the uninitiated, the new-vehicle purchase process is often framed as a “funnel.” Customers enter the top of the funnel with a number of different vehicles on their shopping lists, then gradually start winnowing out the losers as they pass through distinct stages in the process.
Thus, as positioned by CNW, customers generally first look at all vehicles that fit their basic demands in the “Needs” stage, then narrow the number of potential purchases choices as they go through the “Suitability,” “Attributes,” “Design,” and “Price” stage.
Now, I’m not going to attempt to explain/justify/analyze the funnel business itself, but I’ve managed to get my hands on a CNW Marketing report that looks at the behavior of customers who bought a vehicle from the top-20 sales list through August, then indicates the vehicle choices of those customers at different stages of the purchase process. (Note: I realize that, for the Civic and a few others, this mixes data about two different vehicle generations, but I believe it’s a strong indicator of the vehicles’ positioning in customers’ minds.)
For example, of the people who did purchase a Honda Civic through August, their first choice of vehicle during the Needs stage was the Civic. And in the Suitability stage it was the Civic. And in the Attributes stage it was the Civic. And, yes, in the Design and Price stages, it was again the Civic. This may not seem that strange, only seven of the top 20 vehicles showcased customers with this kind of single-mindedness.
Take the Accord. At the first stage of the purchase process, the top choice of vehicles for customers who ended up buying one of Honda’s mid-size sedans happened to be the Toyota Camry.
That’s really no surprise, but consider this: For buyers of the Nissan Altima one of the best-selling mid-size sedan (and cars) in the U.S., their first choice of vehicle during the Suitability, Attributes and Design stages was the Civic. And the Civic was the top choice of Hyundai Sonata buyers during the Needs, Suitability and Design stages. Chevy Malibu buyers? The Civic was at the top of their lists in both the Attributes and Design stages.
I don’t have the space to deconstruct the reasons why the Civic showed up in those specific stages for those specific vehicles, but I will point out that—in an admittedly small sample size—there was only one other somewhat similar situation. Owners who purchased a Chevy Impala had the Accord at the top of their lists in the first stage and the Camry in the next two. But remember, the Impala is sort of an oddball vehicle that, in some ways, splits the difference between the midsize and full-size sedan segments.
The flip side of this: There are five other compacts on the top-20 best-seller list used by CNW, and the Civic showed up as No. 1 in exactly zero of the funnel stages of these cars.
There are certainly many different factors holding back the Civic right now, but perhaps what’s adding to the “problem” is simply that Honda’s compact doesn’t happen to be a very competitive midsize sedan.