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Feann Torr1 Aug 2014
NEWS

Honda sales to rebound

Australian chief insists new models will return Honda sales to record highs

Sales of Honda vehicles in Australia have slumped by more than a third in the first half of 2014 -- from 23,429 last year to just 15,443 sales this year.

That's a drop of 34 per cent, due to the popularity of every model in the Honda passenger vehicle range -- except the new City and Odyssey -- going backwards.

But the second half of 2014 will be much brighter, says Honda Australia Director Stephen Collins, as cars like the just-released third-generation Jazz hit their stride.

"Certainly in the last few years what I've been saying is our real goal is to get back to 60,000 sales," Collins told motoring.com.au . "Our record sales was 60,000 in 2007, and clearly we're down this year for a number of reasons.

"We've had some challenges in the first half of the year, but second half we'll go close to selling 20,000 cars, which will be a big improvement," he said, predicting total annual sales of around 35,000.

Collins is adamant that in the longer-term, Honda sales will return to the highs of 2007 via "new products in new segments" such as the HR-V compact SUV due here in early 2015, but he concedes that core models like the CR-V and Civic have let the Japanese brand down.

Sales of the CR-V are down more than 30 per cent thus far this year due to the end of its "honeymoon period", says Collins. But year on year the biggest decline has been recorded by the Civic, "and that's mainly the five-door hatch".

The reason for the Civic sales nose dive, from 8501 to 4666 units in the first half of 2014 (a decline of more than 45 per cent) is due to uncontrollable forces, says the Honda boss.

"We've been challenged with the currency out of Europe. So the British pound has appreciated about 20 per cent versus the Aussie dollar in the last year or so, which has put a lot of cost and price pressure on."

Honda's UK factory is the only place the five-door Civic is built and as a result of the currency fluctuations the car's price went up earlier in 2014.

"We either take it from the UK and manage currency issues, or we don't take it," stated Collins. And the latter option is not viable, he says.

"It's an important segment. Hatch is a bigger market than sedan in small cars. It's important to have both. Hatches speak to younger buyers."

Collins noted that the new Jazz will prop up sales, as part of a slow rebuild.

"Jazz is a core model. Our plan is to be doing at least 800 per month. I feel confident we can do a bit better than that. In terms of the second half of year, Jazz is very important to us."

But with new versions of the Mazda2 and Toyota Yaris due here in coming months, and a replacement for Hyundai's top-selling i20 soon after that, the Jazz will have to work hard for Honda.

"We're very confident this car will stack up against what's in the market today and what's coming," said Collins, who said that more value could be added to the car if its competitors turn up the heat.

"If we have to take actions based on competitor movement we'll do it as quickly as we can. It's a critical car for us and it's an entry-point to our brand in the range."

It's unlikely Honda will further reduce the price of the Thailand-sourced Jazz in the near future, after launching with a sharp $14,990 opening sticker, despite its more premium traditional pricing – an inconsistency for which rival importer Mazda has criticised it.

But Collins says looking purely at price is missing the point.

"It's sometimes a simplistic view just to say everything's price price price. Price is very important, don't get me wrong, but I think value for money is not just price, it's what you offer in hardware and in terms of emotion and features.

"Our pricing certainly in the last 12 months or so has been sharp, and our plan going forward is to keep it sharp," retorted Collins.

"I think Jazz offers great value for money but pricing is a dynamic thing. It's not just a manufacturer's list price, it's incentives -- everyone's playing that game -- it changes every week, it changes every month," he said.

Collins' boss, Honda Australia CEO Noriyuki Takakura, went one step further and accused four major brands, including Mazda, of rampant discounting to maintain their dominant positions.

"The market is highly competitive with a lot of discounting by the main players, in particular Toyota, Holden, Mazda and Ford," stated Takakura.

Whatever fortunes await Honda in the coming months and years, there are a couple of very bright rays of hope on the horizon, with the NSX hybrid supercar and Civic Type R both heading to Australia in 2016.

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