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Honda’s high-flying HR-V threatens Civic

New star: The popularity of the new HR-V could prove problematic for the company's Civic small car.

Small car rather than medium SUV sales are on the line as HR-V enters the fray

13 Feb 2015

A HONDA executive has told GoAuto that the worldwide success of the HR-V crossover could come at the cost of the already slowing Civic's sales, rather than cannibalising its larger CR-V sibling.

According to Honda Motor Company HR-V project leader Noshiharu Itai, the recent shift from large and mid-size sedans and wagons to SUVs is now being mirrored in the C-segment small car classes, due to the burgeoning popularity of B-sized SUVs such as the Nissan Juke, Renault Captur and General Motors' Trax/Mokka twins.

Speaking to GoAuto at the Australian launch of the HR-V in Hobart, the 30-year engineering veteran revealed that the company is worried about the impact the Jazz-based crossover will have on the Civic's global sales.

“We are very concerned about the effect HR-V will have on Civic actually,” he said. “The C-segment is not growing that much around the world anymore. People who might have purchased a Civic from us are now moving to an HR-V-type vehicle.”

Even Honda Australia director Stephen Collins agrees that his company has to be very careful not to tread on the Civic’s toes, particularly as the it been struggling in the sales race against the Mazda3, Hyundai i30 and Volkswagen Golf.

“I think HR-V buyers share similar requirements to hatchback buyers, so there is some risk of some impact on Civic hatch,” he said. “It is our job is to make sure we still keep selling Civic as we need to. It’s been a challenge for us in the last year or so, and we’re working on plans to resurrect it, so I think there is still some risk of that.

“But ultimately our priority this year is to get the HR-V off to a very strong start and established.”

Civic sales slid 44.8 per cent last year over 2013’s levels, to just 7878 units. In its best year (2007), Honda sold 17,643 examples of its Civic in Australia.

Some of the actions the brand will take to keep Civic sales from sliding further include special edition packs with added equipment to improve value.

However, despite the concern on Civic sales, Mr Itai added that the sheer vastness of the global small-car segment means that it won’t suffer the same levels of contraction as the vehicles above it at the hands of the compact-SUV set any time soon.

“But the hatchback won’t disappear because there is still a very solid customer base around the world,” he said.

The HR-V has been a runaway success in Japan – where it is called the Vezel – attracting nearly 100,000 buyers last year to settle into sixth spots overall – an unprecedented achievement for this sort of vehicle.

The Hybrid variant in particular has proved to be a hit, snaring about 80 per cent of sales, to give the ageing Toyota Prius a hard time. Mr Itai added that the Nissan X-Trail and Juke have also suffered at the hands of the newcomer.

Initially, Honda envisaged shifting about 1.6 million HR-Vs globally in its projected 5.5-year lifespan, but has since revised that upwards to 3.2 million vehicles.

Renault, too, has similar cause to celebrate in France, where the Captur is firmly entrenched in third place behind the company’s top-selling Clio and arch rival Peugeot’s 208.

The HR-V’s low forecasts were partly due to Honda having its fingers burnt badly when the original was launched on an unsuspecting Japan in 1998.

Based on the company’s pre-Jazz Logo light car, the boxy baby SUV was possibly ahead of its time, confusing consumers and flopping badly in the marketplace still smitten with the big-selling CR-V.

So embarrassed was Honda that it felt the HR-V badge was still too tarnished for the home-market buyers, choosing Vezel instead.

Meanwhile, Chinese-market HR-V – sold there as the XR-V – is so called because another company has already trademarked the HR-V name.

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