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Honda Jazz hits a sour note

All that Jazz: Honda says it is committed to keeping its Jazz hatch in Australia, despite pressure from currency and a discount war among larger cars.

Downturn in light-car sales puts pressure on the Honda Jazz hatch

29 Aug 2018

HONDA has revealed that its light car twins – the Jazz hatch and City sedan – are becoming increasing difficult to maintain in Australia, although the company says it has no immediate plans to abandon them in this market. 
Speaking to GoAuto at the launch of the facelifted HR-V small SUV in Melbourne this week, Honda Australia director Stephen Collins said currency fluctuations and a price war at the lower end of the one-size-bigger small-car class had taken their toll on the light-car segment.
“The segment is very tough for two things – one is that small cars are putting enormous pressure on light cars, and secondly the weakness of the Aussie dollar makes it very difficult to campaign light cars,” he said. “And I think that segment is going to be under more and more pressure as the months go by.
“Is it a question of lifecycle, because there hasn’t been too much in new product in that segment, or is it following a similar trend to other passenger car segments? It could well be a combination of both.”
Light car sales have shrunk 7.6 per cent in the first seven months of this year, from 47,016 units last year to 43,500 so far in 2018, continuing the 10 per cent contraction in 2017.
Despite this, Mr Collins insists that Honda Australia will not give up on the Jazz or City, even though their year-to-date sales performances have dropped by 0.4 per cent and 1.3 per cent apiece, to 4523 and 535 units respectively. 
“We are still keen committed to it,” he said. “It is important for us to get new buyers, and we still have a very large base of loyal, more mature buyers, but it will still be a tough segment in the future.
“(As for the City sedan) it’s a very small segment, but our share is very healthy, so we’re continuing with it and will continue to do so.”
The fall in Australian light-car sales has been offset somewhat by the success of the third-generation Kia Picanto launched last year in the smaller micro segment.
Priced around $15,000, the latter has almost single-handedly driven a 20.3 per cent upswing in that end of the market, dominating it with a 65.5 per cent share. Or, in other words, 3183 out of the 4856 cars sold in that class so far in 2018 wear the Picanto badge.
That said, Mr Collins believes there just isn’t the resources nor the profitability in pitching Honda’s upcoming, second-generation Brio into that segment under the prevailing market conditions. 
“For us, we have no plans to have anything below Jazz,” he said.
Jazz sales have been fairly consistent since the first generation burst on the market in late 2002, averaging around 8400 units a year over its tenure in Australia.
Last year it managed a little more than 7300 registrations, down from the 2007 and 2015 highs of 11,663 and 9845 sales respectively. Redesigns occurred in 2008 and 2014, with an all-new fourth generation version expected in 2020.

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