Honda Australia insists customers are happy with its controversial shift to a new sales model, despite a dramatic decline in sales.
The Japanese brand delivered 14,215 cars to customers in 2022, a steep decline from the more than 51,000 cars sold in 2018.
Despite the decline, Honda Australia boss Carolyn McMahon insists that Honda has no plans to follow Holden down the path of an Australian exit.
“Honda is not exiting the market,” she says.
“We had a plan, we’ve realised that plan and we’re happy with it.”
Before leaving his post, former Honda director Stephen Collins was also adamant that Honda planned to reduce the number of cars sold in Australia.
Honda closed more than 30 dealerships as part of a transition to a centrally managed agency sales model with nationally fixed, haggle-free prices.
The brand has reinvented itself, ditching affordable models such as the Jazz while focusing on generously-equipped models sold for high prices, which deliver more profit per car.
It launched the previous-generation Civic in 2017 for $22,390 plus on-road costs, far less than the new Honda Civic that starts from $47,200 drive-away.
As a result, Honda has moved from selling more than 1000 Civics per month to less than 100.
The brand will launch a new model this year in the Honda ZR-V, as part of a drive to focus on high-riding SUVs and hybrids.
Electric cars, according to McMahon, are “not for us not right now”.
Sony and Honda are preparing to introduce “Afeela” electric cars overseas, but Honda Australia does not plan to offer an electric car locally within the next five years.
That approach comes despite the success of Tesla and strong customer interest reported by rivals such as Volkswagen, Kia and Hyundai.
Honda’s local performance pales in comparison to the likes of Hyundai. While the Japanese brand outperformed its Korean rival 15 years ago, Hyundai now outsells Honda by more than five to one.
While sales have plummeted, McMahon says “ actual feedback from customers has been fantastic”, with folks appreciating a softer approach without “pushy salesmen”.
“Essentially we are happy with where we are at,” McMahon says.
“We think the market is happy with the model. Our dealers are happy with the model.”
But dealers who lost Honda franchises are less satisfied.
Honda will face legal action led by the ACCC this September over how it handled workshops that remained open while no longer operating as official Honda outlets.
ACCC Commissioner Liza Carver said in April 2022 that “Honda deprived customers of the opportunity to make an informed choice about options for servicing their car”.