Business Services Industry

Acura's RL goes for the top: Honda's luxury division heads upscale

Chief Executive, The, March, 2005 by William J. Holstein

Earth to BMW: You have a new competitor and it comes from an unlikely direction--Honda's Acura division. The new Acura RL with a V6 engine and 300 horsepower is aiming straight at BMW's 530i sedan. And priced at $49,470, Honda claims a $5,000 price differential with the 530i, which is real money, even to a chief executive.

For years, Acura (and other Japanese manufacturers for that matter) haven't been able to hit the sweet spot for drivers who enjoy the robust handling and power offered by the Germans. Lexus and Infiniti have concentrated on smooth, tasteful rides, but they seem to have had an aversion to guttural sounds emanating from under the hood. Exceptions have been Honda's four-cylinder S2000, which is a screamer, and the six-cylinder NSX.

Now Honda is making a major statement with the Acura RL, which is loaded with new technologies, such as its Super Handling All-Wheel Drive system, which Honda has been working on for 10 years. I liked the vehicle enough to drop in at Honda headquarters in Tokyo. It turns out the company is attempting to elevate Acura into the ranks of the world's most exciting cars. "We want to enhance the brand image," says Hiroshi Kuroda, chief operating officer for automotive operations. "That's why we put in all the new technology."

[ILLUSTRATION OMITTED]

What the Super Handling system does is to transfer torque from the front of the vehicle as it goes through a sharp turn to the outside rear wheel. That rear wheel goes into overdrive, or turns as much as 5 percent faster than the average of the two front wheels. It is a mechanical breakthrough in the sense that Honda has designed a rear differential that can accommodate two tires rotating at different speeds. But of course, the system also relies heavily on sensors and computerized controls.

The net effect is this: The RL can take corners at amazing speeds. I put one through many of my favorite turns at speeds that would have forced most vehicles to start experiencing difficulty. In those circumstances, BMWs go into a controlled four-wheel drift. But even though the rubber burns, the Acura refuses to spin out in any way. It simply handles the turn.

Not that the RL lacks for drama. The engine is the most powerful V6 in its segment with a displacement of 3.5 liters, more than even the NSX. The car can be driven in automatic, but it is also equipped with gear-shifting paddles on the back of the steering wheel, Formula One-style. The paddles offer a far more satisfying shifting experience than any Tiptronic-like system I've encountered.

[ILLUSTRATION OMITTED]

Interestingly, Honda has chosen to equip the RL with General Motors' OnStar as well as with XM Satellite Radio, which includes a navigational system that offers real-time traffic information in 20 markets. All the controls are intuitive, meaning idiot-proof. That's dramatically different from BMW and its iDrive system, which forces the driver to use a mouse-like device with a baffling menu of options. BMW has attempted to make the iDrive easier to use, but it is still befuddling to many drivers.

Otherwise, the RL comes standard with Bluetooth wireless technology, which allows a cell phone to link up to the car's communication system. If you have a phone in your pocket, you can sync it with a button on the steering wheel to make hands-free calls. If the key fob is also in your pocket, you can start the engine by simply pushing a button. There is no key, which is a cool feature seen only on truly high-end cars.

Kuroda says the company intends to launch other Acura models with these technologies to target not only the Germans but also Lexus and Infiniti. My judgment is that Toyota's Lexus is particularly vulnerable because its vehicles emphasize comfort but not true sporty handling. Infiniti seems to be "getting it" with its FX45.

My only reservation about the Acura RL is the price point. If a discriminating driver has $50,000 to spend on a car, BMW, Mercedes and Audi have some very tempting offerings. So does Cadillac. Image is important, let's face it. Volkswagen tried to crack the luxury segment with its very satisfying Phaeton, but the marketplace just wouldn't agree to pay $70,000 for a Volkswagen.

That's precisely the challenge Honda faces with Acura. At the end of the day, an Acura is still a Honda--and Honda is known for making reasonably priced cars that get great mileage and don't break down. That's hardly the stuff of aspirational buying, and the entry-lux segment of the market is particularly brutal. So even if the Acura RL is exactly the right product, how long will it take for the image to change? Honda is determined to find out--and the Teutonic crowd will certainly be watching.