Honda's Oz sales slump continues

Honda's local sales have fallen by almost half over the last seven years as the company struggles to retail its aging models. From a high of more than 60,000 units in 2007, Honda Australia was last year (2014) down to 32,990 cumulative sales, a fall of 15.9 per cent on the year prior.

It's not the worst year in recent times, with Honda's 2011 annual sales tallying just over 30,000 units, but 2014 still indicates that buyers are shopping with their feet, seemingly preferring vehicles of newer design, and better technology. And other brands are seen to offer superior after-sales support.

Month on month, Honda sales are up slightly in January (2015) with an uptick expected to follow the launch of the HR-V light SUV (pictured) from this week. The new model enters one of the most competitive passenger vehicle segments locally, but will face stiff competition from cheaper models, including the Ford EcoSport, Holden Trax and Renault Captur.

Adding to Honda's woes,  a source has reported that Honda Australia has "sacked half a dozen senior sales staff from its Tullamarine headquarters last week, with more to go this week".

The volatile staffing situation coincides with the company's sales slump. That is exacerbated by the aging models, the frequent repositioning of those models and the slower response to a changing business environment. The continued and steady reduction of its new-car pricing is perceived to have some consequent impact on vehicle resale values, the slower adoption of longer warranty and service intervals is discouraging new buyers from purchasing a Honda, and the capped-price servicing program is not seen to be competitive in the market.

But Honda Australia director, Stephen Collins says the cut to staff and the brand's sales figures are mutually exclusive, and that the redundancies come as nothing more than a normal annual review.

"As a part of our normal annual review of our business, unfortunately last week we made five people redundant," explained Collins.

"It was from particular areas of the business [including] parts, our regional operations and our sales area. It was mainly an efficiency and consolation of those roles into some other roles... and absolutely not in response to the sales figures," he said.

Collins added that he was cognisant of Honda's position on the local sales scoreboard, assuring press gathered for the launch of the company's new HR-V light SUV that Honda would return to form within the next three years.

"We plan to be back to 40,000 sales this year... and within the next three years we plan to be back to 60,000 [units]," said Collins. "I think we have the product to deliver that type of growth. Our finish to the year [2014] was significantly stronger than the first half, so I think we're well on the way to get to that number this year."

Citing slow sales — and after less than three years on the market — Honda recently axed its CR-Z hybrid. The model vanished shortly after the Honda Insight hybrid was also withdrawn. It is also expected that Honda will delete the Accord Euro from its line-up once dealer supplies are exhausted mid-year.

To bolster sales, Honda has recently advised a reduction in the list price of its Odyssey people mover and Civic small car range, but insists it will not repeat the move with the HR-V.

"We reduced the price of Odyssey a few weeks ago based on the FTA," clarified Collins. "We thought it was the right thing to do, to pass it on to our customers, and the impact on HR-V is absolutely nil."

"We are launching the HR-V at what we think is a competitive price in the post FTA environment; of course we'll keep monitoring it, but there are no plans to change it whatsoever," he stated.

It seems the company will now pin its hopes not only on Jazz, Odyssey and HR-V, but also on new arrivals including the upcoming Accord Hybrid, reborn Civic Type R and sporty NSX — both of which will be on show at next month's Formula 1 Grand Prix in Melbourne.

Honda also has its recently refreshed CR-V selling nearly 800 units per month, and says it will again update its slow-selling Civic range (essentially no more than a change to the paint palette and interior trim garnishes on automatic variants) range within the next couple of weeks.

The good news aside, Honda says it will not introduce the remodelled 281kW Legend in Australia, owing to slow sales of the outgoing model. And the local arm seems destined to wait for Honda's new turbocharged driveline technologies, all of which were previewed ahead of the 2013 Tokyo motor show. To date, none of the drivelines have entered series production.

It was said at the time that Honda's 1.0-litre turbocharged three-cylinder engines would replace normally-aspirated units of up to 1.8 litres (as per that found under the bonnet of the new HR-V), while a mid-spec 1.5-litre turbocharged four-cylinder would cover the gap from 1.8 to 2.4 litres. Finally a 2.0-litre turbocharged four (as found in the upcoming Civic Type R) is set to span 2.4 to 3.5 litres, eventually replacing the venerable 3.5-litre V6.