Honda thinks the agency’s growing pains are behind it all, but the Japanese brand is still far from its annual sales target – Car News

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Honda Australia’s move to an agency sales model has not been smooth, admits the marque, but the Japanese brand believes startup efforts to reinvent the way it sells cars Down Under are behind them.

When Honda announced it would change the way it does business at the start of 2020, it also revealed plans to reduce its volume from a peak of 51,525 sales in 2018 to around 20,000 units per year – a figure that ‘it may not reach after with an average of only 1290 sales per month after the first four months of trading in 2022.

Talk to Cars Guide However, Honda Australia boss Stephen Collins said the VFACTS sales data does not paint the full picture and the brand is settling into its new normal after the mid-2021 switchover.

“VFACTS is, right now, for a whole host of supply issues, not a good reflection of what’s happening in terms of demand,” he said.

“The reality is, over the past two months, the contracts we’re writing are at 20,000 pace.

“For a whole host of supply-related issues that everyone is having, we’re going to take some time to catch up on that (orders, deliveries and handovers to customers).

“It’s true that – we launched the agency in July last year, and July, August, September was a tough quarter for a whole host of reasons, including closures, and wasn’t on pace .

“We are confident, especially with the lineup we have here and the current pace of bookings, that this is where we are and this is still the forecast and this is still our forecast for the next two years.”

As part of the move to the new sales model, all shares will now be owned and held by Honda Australia, while carrying a standardized price for driving across the country.

Dealerships will still be used for vehicle delivery and handover, as well as after-sales support, exchanges and servicing, but Honda Australia has reduced its business footprint since the agency change.

Honda has also reduced its product lineup accordingly, including discontinuing the Jazz, City and Odyssey, while refocusing its efforts on the Civic, Accord, CR-V and HR- V – which have (or will have) fewer variants offered to reduce complications.

The strategy of offering fewer higher qualities and entering more premium territory has also been criticized, as Honda is abandoning the cheap and happy part of the market, in the same way that Mazda, Volkswagen and even Toyota have done in recent years.

However, Mr Collins said he believed the agency model was the right way forward for the brand and was designed to provide a better customer experience overall.

“We want to focus our business on SUVs, which are more upscale and – probably at the top of the tree – just improve the customer experience, and that’s why we moved to the agency model because we looked back and say ‘good for last’ 70s, the industry is pretty much the same, he said.

“That’s not to say it’s bad, but we just want to elevate that experience.

“The next 12 months for us, now that we’ve stabilized the agency, is all about refreshing programming.

“This [HR-V] this is the start…Civic Hybrid, Type R and then SUVs beyond, so our real focus over the next 12 months is to refresh everything and deliver that “premium” to our dealers and customers.

The brand will roll out a new SUV to slot in between the HR-V and CR-V, which is expected to be called ZR-V, while a next-gen CR-V is also expected to roll out in the near future, with these three crossovers are now expected to make up the bulk of Honda’s sales.

“We expect 20,000 – and there will be ups and downs – that the HR-V will be around 5,000, Mr Collins said.

“But if you take the SUV collective, once we have the full range on sale, we think [SUV] will be about 90 percent of the volume.

“But we’re still committed to the Civic Type R and the Civic Hatch and the Accord, albeit its small volume, but the core of the business will be those SUVs.”

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