Honda eyes 100K, and Acura

HONDA Australia is on target to reach its ambitious sales targets over the next four years and could revive a familiar old model name in 2009 to achieve its next target.

The company has set itself the goal of increasing sales by about 65 per cent from last year’s record 60,000 to some 100,000 units by 2012 in order to be able to launch the Acura brand in Australia.

The next big target is 80,000 sales in 2010 and to that end Honda Australia is understood to be preparing to launch the sedan version of the next-generation Jazz in 2009, which could carry the model name City.

Honda Australia director Lindsay Smalley alluded to the new Jazz/City sedan – which has been sold as the Fit Aria in Japan since 2002 – when telling GoAuto about the company’s strategic plans for the next four years.

“Our growth will come from additional product, significant high-volume product in 2009 as well as a range of lower-volume new model entries into this market,” Mr Smalley told us.

“I can’t disclose what they are but clearly we’re very interested in Civic five-door from the UK (and) there has been mention of a small, international hybrid model [which Honda Japan has confirmed for 2009].

“We’re also looking at bringing in a very high-volume small passenger sedan as well during 2009. I can’t really disclose any more on that product at this point. It will certainly give us a big volume opportunity in the market.” Mr Smalley agreed that it would therefore have to be at the lower end of the market in terms of size and price.

Although the latest Jazz was released late last year in Japan, where it is sold as the Fit, the sedan version has not yet been revealed.

Launched once again only as a five-door hatchback, the new Jazz sits on a longer wheelbase with wider track and is 55mm longer (at 3900mm) and 20mm wider (1695mm) than the current model, but its height is unchanged at 1525mm so that it still qualifies for Asia’s high-rise parking towers.

Power comes from 1.3 or 1.5-litre i-VTEC engines producing 73kW and 88kW of power respectively (compared with 61kW and 81kW for the outgoing model in Australia), both fitted with a continuously variable transmission (CVT) with a new torque converter.

Acura range: MDX, RDX, RL, RSX, TL TSX.

A number of models in Japan have all-wheel drive and some come with a rotating passenger seat to make getting in and out easier.

In seven years, the Fit/Jazz has notched up sales of more than two million units globally and is produced in five countries.

The current Fit Aria four-door sedan is powered by the 1.5-litre engine and sells in Japan for about $19,000.

As reported by GoAuto last week, the UK-built five-door Civic hatch will almost certainly go on sale in the middle of 2009 alongside the four-door Civic sedan (built in Thailand) and the low-volume Civic Type R three-door hatch (built in the UK).

Bringing in the Jazz/City sedan will finally provide Honda Australia with mainstream sedan and hatchback models in the growing light and small car segments, enabling the company to compete more directly with segment leader Toyota.

Anything smaller than a Jazz would seem to be unlikely, although Honda Europe vice-president Ken Kier told us that the company was looking at a sub-Jazz Japanese city car for Europe, where the Smart is very popular.

Rhetorically asking if such a small car would be suitable for a big country like Australia, Mr Kier said: “I can’t see it personally, but I don’t know your market well enough.” Honda Australia is also looking at expanding its compact SUV range with the addition of a 2.0-litre CR-V with front-wheel drive only. The CR-V is currently available only with a 2.4-litre engine with part-time all-wheel drive.

“We’ve been kicking the idea around at Honda Australia,” said Mr Smalley. “I’ve been driving one around Scotland for two weeks and the fuel economy is remarkably good.

“However, (bringing the vehicle to Australia) really depends on the price of fuel and on consumer acceptance of having less power.” Mr Smalley said that the pressure was on the whole car industry to have more fuel-efficient vehicles but that the petrol price point for consumers to accept smaller and less powerful cars was probably $2.00 per litre.

“We have an 18-month lead time on production, though, so we need to pre-empt that.” A number of diesel and hybrid versions of existing models are also under development as part of Honda’s environmental program. Honda’s philosophy is for Civic and smaller cars to have hybrid alternate powertrains while diesel engines will be fitted to its bigger vehicles (including Civic).

Honda Australia is keen to launch the company’s up-market Acura brand here and has set the 100,000 sales mark as a target to ensure Honda dealers have enough volume when some models – notably the Accord Euro – are stripped out to go into Acura showrooms.

Acura’s US model line-up consists of the MDX (flagship large SUV), RDX (turbocharged compact SUV), RL (large V6 sedan based on our full-size Accord), RSX (an Integra-style coupe), TL (sporty V6-powered mid-size sedan) and TSX (our Accord Euro).

Honda’s global policy is to completely separate the Acura brand, with no model-sharing, so this means that the Accord Euro – which is an Acura model in most other markets – would theoretically be discontinued in Australia unless the second model channel is adopted.

“It’s very important globally to have separation of brand and the strengthening of the Acura brand as an independent channel,” said Mr Smalley.

“That could mean that we will transfer Euro into Acura in five or six years’ time.” Asked if the 100,000 figure was absolutely essential to launch Acura or whether the the 2010 goal of 80,000 would be the trigger point at which a commitment would be made, Mr Smalley said: “We must get the numbers to support the existing Honda network (but) it will also depend on a lot of factors at that time.

“Once we hit 80,000, that will create an environment where Honda Motor can very carefully review introduction of Acura.

“We’ve grown over the last seven years from 20,000 cars a year to 60,000 and we’re still growing, so if we do get to 80,000 (it proves) we’ve got the product plan in place to achieve 100,000 and naturally we would start looking at opportunities in the Acura channel.” Honda’s sales in Australia grew gradually to 30,034 in 2000 but plummeted the following year to 20,782.

After this ‘annus horribilis’ – in which he was appointed a director following the retirement of deputy managing director Neal Robertson – Mr Smalley has guided Honda Australia to six years of successive and considerable growth – recording sales of 23,587, 30,817, 36,474, 47,001, 54,202 and 60,529 – to rank number six in the Australian market ahead of Nissan, Hyundai and Subaru.

Hitting the 80,000 mark would likely put Honda above Mitsubishi, while reaching 100,000 would potentially put it above Mazda, and possibly even Ford unless the Blue Oval’s fortunes are reversed.

What’s coming from Honda:
All-new Jazz	Late-2008
Civic five-door	Mid-2009
City/Jazz sedan	2009
CR-V diesel	2009
CR-V 2.0 FWD	2010
Small hybrid	2010
Accord wagon	2011
CR-Z hybrid coupe	2011
Acura brand	2013

Read more:

Civic five-door for Oz

First drive: Honda's new Accord has Euro vision

CR-V diesel coming

Honda shrinks to grow

Tokyo show: Honda to build CR-Z