SAN FRANCISCO - As Lexus, Mercedes-Benz and BMW battle for luxury brand sales leadership this year, Acura has been flying below the radar - as usual.

Honda's upscale division has had a solid year. Sales are up 24 percent over 2009, outpacing the gains made by luxury's big 3. But the recession knocked Acura's ambition to become a first-tier luxury player way off course, reported Automotive News.

To hold down costs, two years ago Honda executives in Japan halted plans for a V-8 engine and rear-wheel drive. Now Acura is still trying to figure out "who we are and who we want to be," said Vicki Poponi, American Honda Motor Co.'s assistant vice president for product planning.

The industry crisis changed everything for Acura.

"The direction we were going became irrelevant within 60 days," said Steve Center, chief marketing officer for American Honda, referring to the economic crash after the collapse of Lehman Brothers in the fall of 2008. "We missed the window. We've had to reconnoiter. We had to go with our strengths."

Acura does have strengths. Automotive Lease Guide has rated it the top luxury brand for residual value for the past two years. It shot from 14th to second in J.D. Power's Initial Quality Study, trailing only Porsche.

And Acura spends just $2,600 per vehicle on incentives, the lowest of any luxury brand except Lexus, according to TrueCar and Autodata.

But while those strengths would appeal to a mass-market brand, they do not solve Acura's image problem, which is the lack of a defined prestige image.

The best Poponi can muster is that Acura is the brand "for people not comfortable wearing BMW or Mercedes."

"Nobody really needs a luxury car," she said in an interview at the introduction of the TSX Sport Wagon. "It's a more emotional purchase. But there are more rational buyers who want all the accoutrements of luxury but who want stealth wealth."

At the same time, Poponi said, marketing to "anti-snobs" probably isn't the best formula. Instead, Acura is aiming its "smart luxury" message squarely at Gen Y, the generation struggling with diminished earning power and a mountain of college loan debt.

"Attainability is still cool to them, and they like nice things," Poponi said. "But they're happy with a Coach bag; they don't need Louis Vuitton."

At Acura's recent national dealer meeting in Denver, executives unveiled an attitude closer to the brand's original slogan in the 1980s: "precision-crafted performance."

"Lexus may hit the mark on luxury on the prestige side," said dealer Doug Fox, president of Ann Arbor Automotive near Detroit. "But Acura is still moving toward a performance-oriented vehicle that is a great value, with normal maintenance and ownership costs."

That still doesn't gain Acura credence in the luxury-vehicle fight. Acura buyers' two most cross-shopped brands are Honda and Toyota, although BMW, Audi, Infiniti and Lexus are close behind, according to Edmunds.com.

Also, Acura's average transaction price of $37,665 is $5,000 less than its nearest luxury competitor, according to TrueCar. Edmunds says the most traded-in vehicles for an Acura - besides another Acura - are Honda, Toyota and Nissan.

All this categorizes Acura as a move-up brand from the mass market, but not something aspired to by other luxury customers.

"Acura's identity isn't clear to many luxury buyers," said Jesse Toprak, TrueCar vice president of industry trends and insights. "If I'm spending that kind of money, do I want an Acura, or a BMW or Benz? Acura simply doesn't have the same prestige. Once you hit the $45,000-plus market, many buying decisions are based on image."

Styling errors

Acura's biggest leap toward a more defined luxury image was its aggressive "keen edge" design, launched in mid-2008 with the 2009 TL. The look included a prominent fascia, disparagingly called "the beak" by detractors.

Acura executives defended the styling, seen most prominently on the TL sedan and ZDX crossover. But consumers have had their own ideas.

Unappealing exterior styling was by far the most-cited reason that shoppers walked away from Acura, according to the 2010 J.D. Power Avoider Study. Nearly half of Acura avoiders cited that reason, far above the industry average and well above most premium brands. The No. 2 reason for not buying an Acura? Interior styling.

"Styling is hurting them," said Kerri Wise, Power's director of research. "It's their biggest hurdle."

That may be a reason that the midcycle change of the TL, arriving in March or April, has had more than a scalpel's worth of rhinoplasty.

Dave Conant, a multiline dealer with a new Acura store in Mission Viejo, Calif., has seen the new, "cleaned-up" version and said, "If it had looked like this in the beginning, we wouldn't have missed a beat."

While consumers have been polarized by the styling of Acura's sedans, the smart packaging of the MDX and RDX crossovers has allowed the brand to ride the wave of consumers returning to light trucks. RDX sales have soared 52 percent this year, while MDX sales are up 46 percent.

Acura's overall gain of 24 percent means it continues to outsell Audi, Infiniti and Lincoln. Last year, Acura sold barely half of its 2005 peak of 209,610 vehicles. But dealers are confident the brand is on its way back toward the old mark.

Yet TrueCar's Toprak said Acura missed a golden opportunity to expand its leasing. While the luxury leaders routinely lease well over half their volume, Acura's proportion is closer to one-third. Typically, its incentives are focused on dealer cash and stair-step bonuses instead of lease subvention.

With its strong residual values, Acura could have made hay with aggressive lease deals that wouldn't have cost them much, Toprak said.

New products soon

At the Denver dealer meeting, Honda executives promised additions to the product lineup, not just from hybrid powertrains but also in new segments. Dealers were told that 2012 would be a big year for new products, likely including the redesign of the ancient RL flagship.

Jim Smail, president of Smail Auto Group in Greensburg, Pa., said dealers were reassured by

American Honda's Center said future sedans will be more distinct from one another, admitting that the current TL and RL are too close in size.

"Within two or three years, it will be quite clear which Acura is which," he said.

Acura probably will return to the compact sedan and hatchback segment currently occupied by the Audi A3, Volvo C30 and BMW 1 series. Once Acura dominated the class with the Integra and RSX but now doesn't compete. That will change, "if the car has the character of the brand," Center said.

One thing an RSX revival won't be is a reprise of the Canadian market Acura CSX, which is scarcely more than a rebadged Honda Civic.

"That is a poster child for how not to do it," Center said. "Acura needs to be more than Honda-plus."