So. Calif. Honda Dealers Eye 6

LOS ANGELES Southern California Honda dealers will meet with six independent agencies next Thursday to determine which shops advance in the regional dealer association’s creative and media review, according to sources.

In the pitch, per sources, are: The Cimarron Group and Mendelsohn/Zien Advertising, both here; Ground Zero and Siltanen & Partners, both in Marina del Rey, Calif.; Secret Weapon Marketing in Santa Monica, Calif.; and Open Minds in Irvine, Calif. (The latter is a subsidiary of Honda’s lead national shop, RPA in Santa Monica.)

There is no incumbent, as hiring an agency represents a dramatic turn in what had been a 12-year ban on dealer advertising instituted by American Honda Motors in Torrance, Calif., as a way of controlling the brand’s image [Adweek, May 15].

The value of the business in play was not included in the materials returned by shops last week.

Sources said the assignment could be worth as much as $50 million in billings. (Spending by comparable regional dealer groups ranges from $20 million by Chevrolet to $40 million by Ford and $65 million by Toyota.)

Steve Jaros, Honda senior manager of marketing, is supervising the review, with input from consultant Lane Bensko.

Client officials declined comment.

“For a long time it was a dead issue,” said a Honda dealer. “But we finally woke up.”

Sources said the Northern California dealers have launched a similar review and that the Tri-State New York area group could follow.

“[Honda and RPA] don’t want this happening all over the country,” a source said. “They think it is the sweater unraveling.”

Sources said resulting ad efforts would be funded via dealer assessments based on vehicle sales; Honda’s national and regional programs with RPA would not be affected. Honda spent $750 million on domestic ads in 2005 and $300 million through May 2006, per Nielsen Monitor-Plus.

A source said, “$300 on a $20,000 car could appear on the sticker as a ‘dealer association advertising’ fee,” which gave some dealers pause, though unanimity was apparently achieved.

Honda sales were up 10 percent to 645,000 units through June compared to the same period last year, per Car Concepts, Thousand Oaks, Calif.