Honda aims to remain a top-10 brand

HONDA Australia says it will hold onto its top 10 standing in the yearly sales charts despite slipping dramatically in the first six months of 2014.

In official sales figures that run from January to June, Honda’s sales have stalled, with the Japanese car-maker naming low run-out sales for the Jazz light car and increased competition from rivals as key reasons behind the slowdown.

Overall year-to-date sales have dropped to 15,443 units, a 34 per cent slide compared with the 23,429 passenger vehicles the company sold during the first six months of 2013.

The Japanese car-maker has consistently made the top 10 in local year-end sales, placing 10th each year since 2011 and even taking eighth place in 2010 ahead of Subaru and Volkswagen.

While its mid-year tally means it is holding on to 10th spot behind ninth-placed Subaru, it also puts in within striking distance of a number of diverse competitors, most notably South Korean brand Kia, which is sitting on a January to June sales haul of 15,229, just 214 units behind Honda.

Also creeping up behind them is German luxury car-maker Mercedes-Benz on 15,006 sales, 437 units behind Honda, while American SUV-maker Jeep trails a little further behind on 14,207.

Back in May this year, Honda revised its 2014 year-end sales target down from 40,000 to 38,000 following a slower than expected start to the year.

The Japanese brand has again been forced to revise its target after a sluggish second quarter.

Speaking with GoAuto at the third-generation Jazz launch this week, Honda Australian director Stephen Collins said he was expecting the arrival of the new light hatch to mark a turning point for the brand’s sales this year.

“The first half of the year we did 15,600,” he said. “In the second half we will do close to 20,000. Simple maths suggests that is around 35,000, which is down on our previous forecast but we are confident, particularly with Jazz in reasonable supply, which we will have, that we can do around about that 20,000 mark in the second half.

“I think that's realistic. Anything beyond that would really be pushing it pretty hard.” Mr Collins said the low sales of the Jazz in run-out mode in the first half had a major impact on overall sales, but predicted renewed interest in the city runabout, with a target of at least 800 units a month.

“In June we did 144 Jazzes because we basically ran out of stock. So if we are doing 800, that’s 700 more than what we have been doing in the first half pretty much so, again that is why Jazz is so important to us.” Earlier this year the company confirmed it was targeting a return to its sales heyday of 60,000 units a year, which was last achieved in 2007 (60,529 units).

Mr Collins said he believed this was still achievable, despite the growing segmentation of the ultra-competitive Australian new-car market.

“We are still working towards that,” he said. “The key is new models in new segments. Our mission as a base is to get back to that level. I think that's where the brand should be and we need to keep working hard to get it back to there.

“It's super-competitive (in the Australian new-car market) but I think our brand is very strong and we still have plenty of work to do to get it back to there, but it’s definitely still our goal.” Another goal is to ensure the brand retained its top-10 status as well as keeping Kia and Mercedes out of the list, which Mr Collins said was achievable.

“I am confident we will make the top 10,” he said. “I think my focus, and the focus of people at Honda Australia is, we need to know our competition intimately. But we can control what we can do.

“I am confident we will end up with around about the 35,000 mark at the end of the calendar year. Getting back to 60,000 in the next few years will well and truly help us get in the top 10.” Mr Collins admitted that Honda’s local dealer network had been doing it tough in recent years, but the company’s future product plan meant there was a light at the end of the tunnel.

“We have a good dialogue, a robust dialogue with our dealer network, like most franchises,” he said.

“And I don’t think anyone is happy that our sales have been where they have been over the last few years. But I think with our dealer network, we need to stay united on what our plan is.

“I think for our dealers it has been tough, there is no question it has been tough. But our dealers are professional and I think over the long journey, Honda has been a very good franchise and will again be a very good franchise for them.

“Our dealers have been very loyal and I think good times will come.” A number of Honda’s core models are struggling in year-to-date sales, with the Civic range down 45 per cent, the CR-V compact SUV behind by 32.5 per cent and the mid-size Accord and Accord Euro down by 43.4 and 58.8 per cent respectively compared with the first six months of last year.

However, a number of newer, non-core models are proving to be popular choices in their segments, giving Honda a slight boost.

The new-generation Odyssey people-mover that arrived in February is the top-selling model in its class on 1244 sales so far this year, ahead of the Kia Carnival (990 units), while the City sedan, a booted twin to the Jazz, is easily the best-selling light sedan in Australia with 1050 sales compared with second placed Nissan Almera on 236 units.

Mr Collins said Honda was looking to replicate the success of these models with other future product set to join the line-up, including the Jazz-based HR-V crossover scheduled to arrive early in 2015.

“Odyssey is a relatively small segment, and we are number one,” he said.

“City is pretty much the same. Our strategy is pretty simple. It's to replicate what we have done with those cars in what we would call core segments or core cars. I think if we do that well, I think good business and success will come.

“You can never take anything for granted because the competition is very fierce, but if we can replicate that with Jazz, which I think we are going to do, and the HR-V, which will be the next full model, I think we will be on the right track.”