Honda Australia: "We're here to stay”

Reassuring news for Honda fans today, however many may still be out there: the brand says it's "here to stay”, despite its record sales slump.

Honda sales have been in freefall since 2018, with the brand’s switch to a controversial fixed-price ‘agency’ sales model in July 2021 only seeming to accelerate the decline.

Previously a mainstay Top-10 player in Australia, Honda’s sales have fallen 72 percent since 2018 when it sold 51,525 units to just 14,215 sales in 2022. It now sits 12th outright in the rankings (February 2023 year-to-date) with 2.3 percent marketshare and sales are down another 10 percent so far in 2023.

Despite the slump, the brand’s new top local executive has defended the company’s agency model switch – and reaffirmed Honda’s commitment to Australia “for the next 50 years”.

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“When we were getting into agency [the fixed-price model] there was lots of talk about whether we were going to be here, whether we were leaving the market,” said Honda Australia director Carolyn McMahon.

“That was a strategic move, for us to be here for the next 50 years… And I hope it demonstrates to you that we’re not going anywhere. We’re here to stay.”

McMahon added that Honda is “happy” with how the agency sales model has been rolled out and blamed poor supply – not a lack of demand for Honda product – as the key reason behind the low sales figures.

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Honda's upcoming ZR-V

“It’s been 18 months now since we went into agency, and as the director in charge of that transformation, we planned for everything except for a pandemic,” explained McMahon.

“Basically, implementation went well; we were well-planned. There have been some challenges because of the pandemic, but essentially we’re happy with where we are at.

“We think the market has accepted the model, we think our dealers are happy with the model. COVID-related supply is not allowing us to be exactly where we want to be with volume, but in the main we had a plan, we released that plan and we’re happy with it. We think it’s pretty good.”

McMahon added that if Honda was able to secure stronger supply – click here to read our recent update on Honda wait times – local sales would be closer to 20,000 units per year rather than the 14,000 units it moved in 2022.

"We planned for everything except for a pandemic."

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Honda HR-V

“That was our strategic volume level,” she said. “That’s where demand is, so that’s fantastic.

"Volume for everyone in the industry has been up and down. Our volume is tied to availability. We’re not immune to the delays and volume challenges that the whole industry has been having, but what we are happy about is the demand for our product. Demand is where we thought it would be.”

McMahon also cited Honda’s own research of 22,000 customers, which shows “75 percent advocate for the agency model” as further proof that the agency switch has been successful.

As well as switching sales models, Honda has undergone several other wholesale changes in Australia. It has rejigged its executive team, relocated its Melbourne head office and also consolidated its automotive, motorcycle, power equipment and marine businesses into one company after 30 years as separate entities.