Honda - The Wheels Report 2014

RESULTS

Needs to learn to keep its head down. The HR-V should bring some sales upside but it’s difficult to see Honda growing too much without other new arrivals or some tempting offers.

Rank: Sales position 2014 YTD: 10th
Sales*: 26,259 (-23.0%)
2014 sales forecast: 30,500
Wheels prediction for 2015: 11th
*To end of October 2014

LESS than a decade ago Honda was the fifth best-selling brand in Australia, with aspirations of hitting 80,000 annual sales by 2010 on the way to an eventual tally of 100,000 sales. The 2010 total dribbled to just 40,000 cars, and last year less than a third of the grander total was achieved.

Needless to say it’s been a massive wake-up for Honda Australia, which was hit hard by head office’s decision to pull back on vehicle development during the GFC.

The once dominant Civic has been hammered in the small car sales race. This is partly because it was tasked with taking on the big boys without a hatchback for years – only the sedan was produced in Thailand, so that’s what came here. The hatch was eventually reborn in 2012 – thanks to Honda’s UK factory – but its prices were far from competitive.

Honda’s grand plans of going upmarket – first with the Legend and later with an abandoned attempt to sell its US Acura brand here – also didn’t help.

The Accord and Accord Euro also suffered in the medium segment, while the CR-V lost the firepower it once had against SUV rivals.

More recently, Honda has struggled to capitalise on market growth, and its former lustre as a premium Japanese brand has faded.

OPPORTUNITIES

HIGH on the Honda hit list is the return of the HR-V. The compact model is designed to shake up the entry-level SUV category and has aspirations of being one of the best sellers in its class. It’ll arrive in February and promises to add to the brand’s sales early in the year.

The chunky five-door will get a 1.8-litre engine and an interior that promises to be more functional than the average cheap and cheerful soft-roader.

The Civic hatch is also due for a facelift in the first half of the year, albeit with a price premium over the Thai-sourced sedan that takes advantage of a free trade agreement that dodges the five percent import tariff.

Honda also has to live without some of its models, killed off as part of a consolidation. The Accord Euro is no longer, while the City is a victim of slow sales of small sedans.

CHALLENGES

HONDA’S biggest weakness could be itself. The brand is brash about its sales forecasts for 2015, suggesting the HR-V should add close to 10,000 sales annually.

That would translate to annual sales of 40,000.

But there’s also a very real chance the new compact SUV could take a chunk out of other models in the Honda showroom, specifically the Civic and CR-V. While each is different, there could be enough people who decide the HR-V will happily replace the other two models.

At least the new Jazz – complete with a standard reversing camera and one of the bigger light car bodies – should add to the tally.

But dealers will be without models that previously helped bolster the overall sales tally, such as the Euro and City. The downside is incremental sales, but there could be upside in keeping minds more focused on the main game and coaxing buyers back to core models.

Then there are the rivals. Mazda continues to trounce Honda at every opportunity and it’s difficult to think some of its former buyers haven’t transitioned over to the Japanese rival.

Hyundai, too, is a brand on the march and is gaining traction with more discerning buyers.

Besides, it’s not the first time Honda has been wide of the mark when it comes to forecasting its popularity – although we’d love to be proved wrong.

Grade: B-