Honda switching to fixed prices in Australia, will drop slow sellers

Honda Australia is poised and ready to throw the switch on a dramatic business model restructure that has been 12 months in the making, introducing the most significant transformation in Honda’s Australian history spanning more than half a century.

The 2021 strategic plan will go live on July 1 this year, revealing the work of 150 Honda Australia staff and a complete top-to-bottom remodelling of local operations that Honda promises will improve customer experience, streamline operations and overhaul the national dealer network.

It follows an announcement in March 2020 that the Japanese brand would start the transformation process, stripping back underperforming models, culling marginal dealers and preparing the ground for change.

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The e could serve as the first electric Honda in Australia

But if the announcement almost exactly a year ago was a metaphorical sanding back to bare metal, then Honda is about to apply the top-coat and proudly roll its new-look model out of the spray booth.

Speaking at the announcement of the strategy, Honda Australia director Stephen Collins said the company was introducing a fresh culture that places a greater importance on the image and perception of the company – and not outright sales.

“We’ve spent the last 12 months re-engineering everything in our business,” he said. “Our customer experience right now is pretty good, but the intent is to take it to a new level and take up a leadership position in the auto industry in terms of a transparent and seamless process for buying new cars.

“We’re shifting from a volume-driven business to what we call a ‘quality business’. This is about prioritising the customer experience and not being obsessed with chasing volume.”

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Updated Civic range will feature prominently in the new-look network

Key to the new-look Honda is a complete reimagining of the dealer network and the introduction of a ‘hub and spokes’ model that retains existing major dealerships in metropolitan centres which, in turn, serve smaller outlying operations in suburban areas.

The hub-and-spoke model addresses inefficiencies in the Honda system resulting in flagship bricks and mortar where high traffic warrants it, and leaner outfits that could include lite dealerships that may only have a one-or-two car showroom or just a service centre in some cases.

Almost as significantly, Honda Australia will introduce the decisive move to own all vehicle stock in the national network, including showroom cars, demonstrators and service replacement vehicles.

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This, says Collins, reduces risk the dealer previously had to shoulder as well as allowing the customer to get the exact car they want as quickly as possible, rather than making a round peg fit a square hole with existing stock at the dealership.

Finally, from the July 1 go-live date, Honda will switch on nationwide one-price driveaway pricing, standardising the cost of a new vehicle no matter where in the country it is being sold or how nicely you ask for a discount.

According to Collins, the decision is in response to customers disliking the haggling process and the need to create a simpler, more pleasant process for buying the right car.

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Honda has no plans to introduce the new Jazz Hybrid to Australia at this stage

And while the company slashed a number of models and variants from its ranks at the start of 2020, the new strategy includes a complete audit of the current line-up and the introduction of fresh metal.

“Our aim is to bring good and exciting products to the market,” said Collins. “One of the things we’re looking at is our sourcing strategy and there may be options to source more product from Japan or elsewhere that might open up opportunities.

“I’m very confident we’ll be bringing the great products – not all of the ones available globally and unfortunately there’s no pick-up on the horizon, but there is much more opportunity.”

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Honda's 50th anniversary celebration fleet

That new hardware will likely include a flagship model of sorts to potentially carry some of the brand power of the outgoing NSX super-coupe, and alongside the potent and highly popular Civic Type R. Although, exactly what form the ambassadorial car will take, will be revealed later in the year.

“There’s always a role for that type of vehicles – whether it be a sports car or EVs or something else, I think there’s always that opportunity. We are exploring all those now and in a few months hopefully we can share all those plans with you.”

When the big plan goes live in the middle of the year, little will change in appearance at the network of dealerships around the country aside from some “subtle changes”.

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2021 Honda Civic Type R

In the run up to July, customers can expect to see a handful of smaller metro dealers close their doors, while new Honda signs will be erected at other locations including shopping centres such as AutoMalls Brisbane Airport and the Indooroopilly Shopping Centre.

In all, the existing network will be slightly trimmed from just over 100 to about 90. No changes are expected in rural and regional locations.