On-track agency model: Honda

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HONDA Australia says that after a brief transition period, its dealers have fully adapted to the agency sales model and are enjoying better than expected sales of the brand’s new single-grade Civic VTi-LX hatchback.

Talk to GoAuto at the launch of the second-generation HR-V small SUV this week, Honda Australia’s automotive operations manager Stephen Collins said that although sales volumes were significantly lower under the recently adopted agency model , sales of the Civic model were better than expected.

“(The Civic) is tracking just under 100 units per month and at the moment that reflects less demand in the market than supply. The Civic is a bit above what we expected and, of course, she’s playing a different role than she’s played in the past, Collins said.

“But looking to the future, the SUV stable will become the core of our business over the next two years. I think that will end up being almost 90% of the volume we sell locally, from this feed base of three SUV models.

At the launch of the small Civic hatchback late last year, Mr Collins said the model would likely sell 900 units a year in Australia (75 units per calendar month).

With an average number of nearly 100 units per month, buyers seem to be drawn to the Civic’s higher equipment levels – albeit at a higher price – a point which Mr Collins said bodes well for further development. other new models, including the HR-V

“There are a lot of existing Civic customers, the loyal Civic buyer who has probably owned many generations of the model, especially high-end variants, moving into the new car. We call these 100% Honda buyers: Honda buyers. Honda to Honda – and they make up a big chunk of next-gen Civic buyers, he added.

“But that doesn’t mean we don’t win sales from other brands. There’s a percentage of buyers coming from the European hatches to the Civic, and luckily that’s exactly what we expected.

Mr. Collins said the majority of buyers who have purchased vehicles from Honda since the agency model was introduced throughout the dealer network were satisfied with the price transparency and ease of transaction at the dealership. , but admitted that not everyone liked the ‘one-price’ model.

“We knew the one-price model wasn’t for everyone – there are buyers who still want to ‘chase a deal’, and that remains true today. But what we do know, based on numerous reviews, is that price transparency and ease of transaction add up to a really positive experience for buyers who have purchased a Honda in the last nine or ten months. “, he added.

“We said we wanted to do about 20,000 units (per year), and if you look at the number of contracts we’ve written over the past few months, then we’re definitely at that rate. Profit is obviously determined somewhat by supply costs, but overall it’s fair to say that we landed exactly where we thought we would land.

And it looks like dealer opinions following the move to the agency model have also started to thaw. Mr Collins admitted the transition has been a “big change” for staff at Honda centers across the country, but said the consultation-based nature of the dealings served to forge stronger relationships with customers than in within the framework of the traditional negotiation-based sales model.

“We obviously deal very closely with our Council of Dealer Representatives – we meet with them about once a month. I’ve also visited all of our metro dealerships over the past few weeks… They’re profitable and they’ve understood how the agency model works,” Collins said. GoAuto.

“In some ways, it’s a bit more difficult for our rural and provincial dealerships because there’s no improvement in some service activities, but, for the most part, our network of 90 Honda centers works well.”

Mr Collins said Honda Australia would continue to work with its dealers to resolve the start-up issues encountered with the (still new) agency model and that the customer and dealer experience would continue to improve.

“We continue to improve. We have another discussion with our metro dealer group in a few weeks, and we’re making sure to keep an open dialogue with all of our dealers to find out what’s working well and what’s not,” he said.

“Overall I have to say things are pretty much where we expected them to be. We still have some improvements to make but overall I think it’s pretty good. .

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