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Honda works on brand improvement

Brand builder: Honda believes its next-gen Civic will be popular and will help rebuild brand perception.

Customers returning to Honda on back of HR-V but more work to be done

21 Mar 2016

THE positive critical reception and strong sales of the HR-V crossover has marked a turnaround for Honda in Australia, but the company’s senior management admits that it has some way to go to rebuild its brand perception with consumers.

Launched early last year, the HR-V was an instant hit, capturing enough sales to catapult into the top sellers in the sub-$40,000 small-SUV segment with 10,899 units shifted, giving it a healthy 11 per cent share of the competitive segment after less than a year on sale.

It outsold the popular Nissan Qashqai (10,556) in 2015, as well as Subaru’s XV (7168) and the Holden Trax (6350) and was also largely responsible for Honda’s 21.5 per cent increase in sales over 2014 for an end-of-year tally of 40,100, the first time it had exceeded 40,000 since 2010.

Speaking with journalists at a special viewing of the new-generation Civic in Melbourne last week, Yarra Honda and Eastern Honda dealer principle Tony Jowett said the HR-V had been responsible for an increase in interest in the Honda brand.

“It has been significant nationally, it was the turning point for the brand,” he said. It gave us something new and fresh and sexy to talk about and we haven’t been in that space for while sadly. It has had a significant improvement to overall volume, therefore generating more service customers.

“Last month both dealerships (Collingwood and Doncaster) took numbers (for HR-V) equal to our total numbers that we were taking a couple of years ago when we bottomed out. It is significant.” Mr Jowett said the strong interest in the HR-V has also brought some much-needed optimism to dealers.

“Finally we find ourselves at a point where it is getting easier for us to go the market and recruit and attract people back to the Honda brand which has been a major challenge for us.

“All of a sudden, the jungle drums are beating about what’s going on at Honda.

Honda is about to have another burst. Staff morale is fantastic. Finally for the first time in a while we have a spring in our step.”

Despite the lift in sales and morale, Honda Australia general manager of customer and communications Scott McGregor said consumer perception of the Honda brand needed a lift.

“It’s fair to say from a primary brand perspective the brand isn’t where we would like it to be,” he said. “A lot of people remember how strong the Honda brand was in the 90s and early 2000s and certainly our intention is to get back to that place.

Mr McGregor said the tenth-generation Civic that arrives in sedan guise mid-year, should have a positive impact on the brand in Australia.

“It’s fair to say that the strongest brands in the market all have very strong small cars and that’s why Civic is so important to us in terms of this launch.”

Honda’s previous reputation as a semi-premium Japanese brand has slipped in recent years, but Honda Australia director Stephen Collins said he believed the company still has that reputation despite pressure from Korean and European manufacturers.

“I think we have been and are being squeezed,” he said. “Europeans are coming down with product and price and so forth. I think all the Koreans are trying to come up. And there is us and Mazda and a few others certainly in between.

“I think we cert want to have a prestige element. But we have got to deliver that in value to the customer. So I wouldn’t say we want to be European, but I think some differentiation is important. If you are in the middle it is a tough battle because of what is happening with the Europeans and the rising of others. We think the experience we give our customers can be a key differentiating factor for us.”

Honda topped last year’s JD Power Customer Service Index that measure aftersales and customer service levels of the mainstream brands in Australia.

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