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McClatchy-Tribune  07/15/2014 8:29 AM ET
Honda begins production of new model in Ohio [Dayton Daily News, Ohio :: ]

July 15--Honda began mass production Monday of the redesigned 2015 Acura TLX at its Marysville Auto Plant, an attempt to become more competitive in the luxury market and a sign analysts said shows the company's continued commitment to Ohio.

Workers at the facility will produce between 50,000 and 60,000 of the cars a year, said Rob May, plant manager in Marysville.

Honda is one of the region's largest employers, and company officials have previously said the Marysville facility employs about 1,500 in Clark and Champaign counties, and about 1,200 from the rest of Southwest Ohio. The company employs about 14,200 across the state.

Honda's continued production of the TLX at the facility shows the company's faith in the local workforce, said Stephane Brinley, a senior analyst at IHS Automotive.

"It's been an important investment for (Honda) and that's not changing," Brinley said of the Marysville facility.

Competition in the luxury market is increasing, she said, and the TLX will compete with vehicles produced by Lexus or BMW.

"It's a really tough segment and it seems to be getting tougher and tougher every year with some other companies coming on," May said. "It's a tough battlefield in this segment for sure."

The TLX is Acura's most technologically advanced car, May said, featuring new powertrains and improved handling, among other features. It will serve as a mid-sized sedan, larger the Acura's ILX and smaller than the RLX.

The company won't need to make any additional investments or hire new workers to produce the new model of the TLX. However, Honda has invested millions in the state in recent years for a variety of projects, with plans to spend more in the future.

Recent investments include:

--$87 million at the Marysville plant last year for a 95,000-square-foot expansion to produce the hybrid Accord sedan.

--$181 million at the East Liberty Auto Plant and $481 million at its Anna Engine Plant.

--Plans to spend $70 million next year for a Performance Manufacturing Center in Marysville to manufacture the Acura NSX supercar.

The TLX was first produced in Marysville in 1999 and this will be the fourth generation of the model, May said. Typically, vehicles receive a makeover every five or six years. Marysville is the sole producer and exporter of the car.

The Marysville plant also produces the Honda Accord.

The new TLX will cost between $30,000 and $40,000 depending on features, and will be available at dealerships nationwide as early as August.

The luxury market is becoming increasingly competitive, May said, and the new version of the TLX is expected to make Honda more competitive.

"Sales have continued to increase," May said. "The problem is the competitors are starting to expand so your piece of the pie can get smaller if you don't maintain a high-level of quality."

In recent years, Acura's sales have focused on sport utility vehicles, Brinley said. The new TLX is expected to get the brand's sedan range into better financial shape. Sedans in general are under increasing pressure from the SUV market, she said.

About 25,000 units of the most recent version of the TL model sold last year, Brinley said, compared to about 94,000 in sales from BMW's competing sedan. She said analysts expect sales of the new TLX to improve to about the mid-40,000 range in the next few years once production ramps up.

"Acura does need to revive its sedan lineup and capture the attention of the buying public more strongly than it has," Brinley said. "The TLX is a strong contender for that."

 

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