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Honda aims to kick-start Acura with new models

By Chang-Ran Kim

DETROIT (Reuters) - Honda Motor Co <7267.T> unveiled three Acura models at the Detroit auto show on Monday including an entry-level sedan and an NSX supercar as it aims to put the struggling premium brand back on the map in the crowded U.S. luxury market.

The 25-year-old Acura brand is in bad need of a makeover after sales in its main U.S. market have dwindled to less than 60 percent of their peak of nearly 210,000 vehicles in 2005. Last year, sales fell 7.7 percent to 123,299 vehicles, albeit partly due to supply constraints from the March 11 disasters in Japan.

With the addition of the entry-level ILX -- a brand new Civic-based compact sedan -- and a remodeled RDX crossover SUV to its lineup this spring, Honda said it expects a 46 percent jump in U.S. Acura sales in 2012 to 180,000 vehicles. That is based on the assumption that U.S. industry sales will total 13.5 million this year -- at the lower end of most forecasts.

"We'll have the NSX at the pinnacle of the brand, while the ILX will be the gateway," Honda North American President Tetsuo Iwamura told a small group of reporters at the auto show. "We now have a uniform design, and the technology behind the cars, and we need to make sure this brand image seeps through."

The supercar will be the third generation of NSX, succeeding two earlier models produced between 1990 and 2005. Honda had been working on a next generation NSX with a V10 engine but dropped the plan when the financial crisis hit.

Rivals Audi and Nissan Motor Co's <7201.T> Infiniti brands are also looking to capture buyers with a sporty and youthful image, challenging BMW's lead.

Soon after its debut in 1986, Acura became the top-selling premium nameplate in the United States by offering quality with luxury, until Toyota Motor Corp's <7203.T> Lexus followed three years later to snatch the spot.

With other players also stepping up their game, analysts said Acura would face a tough race.

"Acura is coming into a more difficult environment," said Guggenheim Securities analyst Matthew Stover.

"In the past, GM and Ford were pushovers (but) Acura and Infiniti are going to feel the competitive pressure of the domestic manufacturers and the global strength of the more ambitious Germans," he added, noting that Audi was also preparing some offerings on the smaller end of the market.

Still, with ambitions of growing into a global brand, Honda said on Monday it would launch the brand -- now only available in the United States and China -- in the United Arab Emirates and Saudi Arabia next year and in Russia and Ukraine in 2014.

ACURA GETS FIRST HYBRID

Acura's ILX will come in three engine types, including a gasoline-electric hybrid -- a first for Acura. The NSX, expected to cost more than $100,000, will be resurrected with a V6 engine and a newly developed high-performance all-wheel-drive with an electric motor-twinned dual clutch transmission.

"Like the first NSX, we will again express high performance through engineering efficiency," said Honda Chief Executive Takanobu Ito, who led development of the first aluminum-body NSX. "In this new era, even as we focus on the fun-to-drive spirit of the NSX, I think a supercar must respond positively to environmental responsibilities."

Honda said the NSX will be developed by a U.S.-led engineering team and reach the market by the end of 2014 in the United States. The car will be assembled at a yet-to-be-named site in Ohio and supply other markets, with parts procured locally as much as possible, executives said.

Honda also unveiled a prototype of the second-generation RDX with a new, more fuel-efficient 3.5-litre V6 engine, six-speed automatic transmission and all-wheel-drive system.

The RDX will be built at Honda's East Liberty, Ohio, factory and the ILX at its Greensburg, Indiana, factory.

(Additional reporting by Deborah Gembara; Editing by Matthew Lewis and Steve Orlofsky)

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