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Honda Increases Price Slightly on Its Best-Selling Model

September 26, 1997| From Bloomberg News

Honda Motor Co. raised the average price of its new Accords by 0.5%, or $110, while cutting the price of V-6 models in a move that analysts said is likely to pressure Detroit's auto makers.

The price of the six-cylinder Accord LX was cut by $950, to $21,550, for 1998. The price of the most popular Accord, the four-cylinder LX sedan, rose by $100, to $19,090.

Honda's pricing mirrors that of other auto makers, who have raised 1998 prices modestly, if at all, in the face of some softening of demand and increased competition.

The new Accord "slows down the Big Three's ability to attract new buyers from import brands," said Susan Jacobs, an auto industry consultant in Rutherford, N.J.

General Motors Corp. and Chrysler Corp., which have introduced new mid-size models, are especially vulnerable to pressure from the new Accord, analysts said.

The Accord and Toyota Motor Corp.'s Camry combine new designs and modest price increases with a reputation for quality.

Detroit auto makers' car sales through August fell to 3.46 million, down 7.1% from the year-earlier period. Asian-brand car sales rose 2.3% to 1.27 million.

The Accord was the second best-selling U.S. car last year, after the Ford Taurus, and is expected to finish in the top three with the Taurus and Camry this year. Honda's Marysville, Ohio, plant is accelerating production and may build more than 400,000 Accords next year, perhaps enough to unseat the Camry.

Honda sold 382,300 Accords last year.

Better efficiency in the Accord's design and at the Marysville plant helped Honda add $2,000 worth of equipment to the new model, said Dick Colliver, executive vice president of American Honda Motor Co., which is based in Torrance.

Honda saved costs by designing the new Accord in 24 months, compared with 32 months for its predecessor.

Accord sedans go on sale today, and coupes Oct. 25.

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