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HR-V leads Honda Australia's growth

Civic duty: The tenth-generation Civic sedan will arrive in showrooms mid-next year and Honda is expecting big things from the reborn small car.

Honda says HR-V is lifting sales this year and Civic could do the same in 2016

Honda logo6 Nov 2015

By TIM NICHOLSON

HONDA'S instantly popular HR-V crossover is bringing a new more youthful buyer to the brand which will help it grab 40,000 sales by the year's end.

The reborn HR-V has been a sales hit since it launched in mid-February this year, averaging about 1000 units a month for a year-to-date total 9199 sales to sit behind the now discontinued Hyundai ix35 (15,089), Mitsubishi ASX (10,368) and the other new crossover that has shaken up the segment, Mazda's CX-3 (10,052).

Honda Australia director Stephen Collins told GoAuto that the car-maker was pleased with the reception to the HR-V, adding that the compact crossover appeals to a wide buyer set.

“We have a high percentage of conquest buyers, which is what we set out to do,” he said at Honda's Tochigi research and development facility north of Tokyo.

“It is appealing to a massively wide audience.

“The really good thing is it is appealing to younger pre-family both male and female (buyers) which is what we have lacked in the past. But it is also appealing to more mature buyers. But the important thing for us is a lot of the business is conquest.

“There has been very little impact on CR-V especially two-wheel drive. A tiny bit of impact on Jazz but it is pretty small. So the vast majority of business is incremental which is what we set out to do.”

Mr Collins said there was some evidence of potential buyers coming into a dealership to look an an HR-V and then leaving with a CR-V, if they decide they need more space.

“Yes there is a bit of that and a bit the other way. A few people coming in on CR-V and seeing HR-V and maybe price comes into it so there is a bit of that. I think that’s ok, as long as we are getting people in and they are walking out with a Honda that’s not so bad.”

HR-V stock is tight at the moment, according to Mr Collins, who said that some of the higher-grade variants have a waiting list of “a couple of months”.

Mr Collins said the Honda dealer network is happier this year compared with last year, when the company ended year 16 per cent down on its 2013 result, thanks to its healthier sales figures, and suggested the tenth-generation Civic – due mid-next year in sedan guise ahead of the hatch shortly after – will also help Honda's bottom line.

“I think the reality is that our volume is up close to 30 per cent. Our dealers are making a bit more money. I think we have still got plenty of work to do but the mood is certainly more positive.

“The next big step for us will be Civic. That will really be a step in the volume direction. From a gross profit perspective the dealers should do very well out of it. We have improved but we still have a long way to go.”

As previously reported, the next Civic sedan and hatch will be much more closely related than in the past, and is expected to have more of an impact than the current model which has fallen by 43.3 per cent year to date compared with the same period last year.

It is now running twelfth in the sub-$40,000 small-car segment with 3825 sales this year and is trailing the Subaru Impreza (4173) and the Ford Focus (5841).

Mr Collins said Honda Australia was “looking for a big turnaround” for Civic Down Under, and added that the company has bullish sales targets in mind.

“I think if we get similar private share to what we have got with HR-V – again we are yet to put a number on it but if we weren’t doing 700 or 800 sedans a month I would be disappointed, which is a long way from where we are today.

“Civic awareness is still good. We just need to get back in the small-car shopping list when we launch it. We will have a big launch campaign to get it back on the shopping list.”

Specification and pricing for the Civic are still a way off, but Mr Collins said he would not rule out employing a similar strategy the car-maker used for the HR-V in not offering a manual option.

“Honestly if you asked us before we launched it I would have said we would have taken a manual primarily as a price point. But you know what, we are selling a thousand or more (HR-Vs) a month and it's not an issue. I think if it became available we would certainly look at it but it is not a major priority.”

In terms of overall sales, Mr Collins said he is “absolutely” confident Honda can crack the 40,000 sales barrier it has not hit since 2010.

“I don’t take anything for granted but we are well on track. All going well we will certainly hit it and we said that at the start of year.

“Next year we haven’t settled on a final number but I think we will do 40,000 again so it will be more of a consolidating year for us at that volume. The mix will change, obviously we will be selling (new) Civics from halfway through the year. So I think 40-ish will be about right for us.” Mr Collins said the company was committed to the Accord mid-sizer, despite its sliding sales in a shrinking segment, and its status as the slowest-selling model in the car-maker's current range.

“We don’t have it as a core model currently, it is what we would call a supporting model. But as a flagship sedan it is an important model for us. It is a tough, tough segment. I would certainly want to keep it in the range and I think it still has a role to play. Although the volume is not huge.”

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