Honda Aims for Price Wary Buyers With Redesigned 1996 Civic

CALL it Honda's latest Civics lesson. And the competition had better study hard if they plan to keep up. Since its introduction in 1973, the Civic has been an industry benchmark, the vehicle that sets the standard for the subcompact class. Now, 25 years after Honda introduced its first car to American motorists, the automaker is ready to do it again. The Civic has been completely redesigned for 1996, and it's larger, roomier, quieter - and a lot less expensive to build. Those are all critical qualities. The competition is getting tougher, and American buyers are getting far more demanding. They want a lot more car for their money, but they don't want to pay for it. The challenge, says American Honda Motor Co. president Koichi Amemiya, is to ''offer customers more value for the money, but not by building cheaper cars.'' Now in its sixth generation, the Civic is certainly more car than the one Honda unveiled in 1973. The '96 Civic averages more than two inches longer and three inches taller than the vehicle it most immediately replaces. The newest version of this subcompact line is actually as big as the compact Honda Accord sold at the beginning of the decade. ''One of the biggest challenges we faced was developing a car that meets the needs of consumers around the world,'' says Hiroyuki Ito, head of the development committee for American Honda's parent company, Honda Motor Company. With only slight modifications, the Civic is sold in more than 100 countries. And consumers have distinctly different tastes from one market to the next. In Japan, for example, potential buyers rated fuel economy their No. 1 concern. That didn't even make it into the Top 10 in Europe or the United States - where tire wear was ranked the most pressing concern. To help fine-tune the '96 Civic, it is being built in three ''flavors.'' Honda decided to make distinctly different body styles for the coupe, hatchback, and sedan models, reflecting the different tastes, ages and lifestyles of the people who buy them. Motorists will notice other improvements. A lot of attention was paid to NVH, the industry code for noise, vibration, and harshness. The '96 Civic is a surprisingly quiet car, with a smooth, responsive ride. That reflects a lot of additional sound-deadening material and the fact that the car's body itself is significantly stronger and more rigid. The new Civic offers three variations on the basic 1.6 liter, four-cylinder engine. Californians can opt for an extremely low emissions model. The top-of-the-line version comes in with 127 horsepower, a sizable boost over last year. The '96 offers the traditional choice of five-speed stick or four-speed automatic, but buyers may also opt for an unusual alternative, dubbed the CVT. Short for continuously variable transmission, it's essentially a shiftless transmission. Using a set of belts to connect two conical steel pulleys, the transmission continuously alters its gear ratio to get just the right mix of fuel economy and performance. And an early test drive suggests that it actually improves both simultaneously. At a time when the average automobile has topped the $20,000 mark, the most important feature of the new Civic will be its price tag. Considering the strong demand - for both new Hondas and used - company planners have never been shy about demanding a premium for their products. That situation has only been made worse by the rising yen, which has added thousands to the cost of the typical Japanese import. Honda has gone to great lengths to hold the line on the new Civic. For one thing, it plans to build all its '96 models in North America, either at its plant in East Liberty, Ohio, or another in Ontario, Canada. And 92 percent of the parts will come from American-based suppliers, up from less than 80 percent on the old model. By government standards, the Civic now qualifies as a ''domestic'' car. In developing the new car, Honda was able to drive down development and tooling costs by 30 percent, a considerable savings on a billion-dollar project. Sharp-eyed observers at a recent press preview found other ways the automaker held down costs. The side mirrors are no longer ''breakaway,'' designed to fold back if they bump into a tree or sign post. Some suspension pieces are now built from stamped steel, rather than the more costly die-cast steel used on the old Civic. And there's no longer a corrosion-resistant chrome tip on the exhaust pipe. ''We won't finalize pricing until just before the cars go on sale in mid-October,'' says Tom Elliott, American Honda's executive vice president for sales. ''But right now, I'd say the increases will be about 1 percent.'' That would translate into a base price for a stripped '96 Civic hatchback of about $10,225. But a fully loaded sedan will likely be up close to $17,000. That's about as much as a buyer would pay for a roomier Dodge Stratus sedan.