The switch to non-negotiable fixed prices appears to have backfired on Honda Australia, which has just posted its lowest sales on record.
Honda Australia has posted its lowest new-car sales on record in its first full year of non-negotiable fixed prices.
The Japanese car giant – which was a Top 10 fixture for the previous two decades – has slipped to 19th outright and now represents less than 2 out of every 100 new cars sold in Australia.
The stunning fall from grace comes after Honda Australia elected to reduce the number of showrooms nationally, streamline its model line-up, and introduce non-negotiable fixed prices for new cars from 1 July 2021.
The former boss of Honda Australia, Stephen Collins, who was instrumental in the shift to the controversial business model, announced his sudden departure from the company in October 2022 after more than 13 years with the automaker and, prior to that, more than 12 years with Nissan.
Figures published today by the Federal Chamber of Automotive Industries (FCAI) show Honda reported 14,215 new cars as sold in 2022, the lowest figure since data was collected by the organisation since the late 1990s.
It is also the lowest market share on record for Honda in Australia, with official data showing just 1.3 per cent of new-car shoppers purchased a vehicle from the Japanese brand.
Historically a Top 10 brand, Honda slipped to 19th place on the Australian new-car sales charts in 2022, after falling to 14th place the year prior.
When it launched the switch to non-negotiable fixed-price models, Honda Australia said its plan was to make more profit from each vehicle while selling fewer cars.
This approach – along with rising production and shipping costs in the wake of the global pandemic – saw Honda new-car prices rise sharply in Australia, however customers and dealers no longer had the ability to negotiate due to the new business model.
While some dealers say they have maintained their status-quo, a number of Honda dealers have told Drive the switch to non-negotiable fixed prices has slashed the number of new cars they sell, reduced the number of trade-ins, cut the number of finance opportunities, and also put on a dent on their service and parts departments – all of which contribute to their overall profit and viability.
Despite the slump – slashing sales by two-thirds in five years – Honda Australia says it is committed to its new business structure and is here for the long haul.
Honda car sales in Australia
- 2022 – 14,215, 19th, 1.3 per cent market share
- 2021 – 17,562, 14th, 1.7 per cent market share
- 2020 – 29,040, 12th, 2.7 per cent market share
- 2019 – 43,868, 9th, 4.3 per cent market share
- 2018 – 51,525, 10th, 4.8 per cent market share
- 2017 – 46,783, 11th, 4.9 per cent market share
- 2016 – 40,838, 12th, 3.5 per cent market share
- 2015 – 40,100, 10th, 3.5 per cent market share
- 2014 – 32,998, 10th, 3.0 per cent market share
- 2013 – 39,258, 10th, 3.5 per cent market share
- 2012 – 35,812, 10th, 3.2 per cent market share
- 2011 – 30,107, 10th, 3.0 per cent market share
- 2010 – 40,375, 8th, 3.9 per cent market share
- 2009 – 41,443, 8th, 4.4 per cent market share
- 2008 – 52,571, 7th, 5.2 per cent market share
- 2007 – 60,529, 6th, 5.8 per cent market share (record)
- 2006 – 54,202, 5th, 5.6 per cent market share
- 2005 – 47,001, 8th, 4.8 per cent market share
- 2004 – 36,474, 8th, 3.8 per cent market share
- 2003 – 30,817, 8th, 3.3 per cent market share
- 2002 – 23,587, 9th, 2.9 per cent market share
- 2001 – 20,782, 9th, 2.7 per cent market share
- 2000 – 30,034, 7th, 3.8 per cent market share
- 1999 – 28,517, 7th, 3.6 per cent market share
- 1998 – 25,571, 8th, 3.2 per cent market share
- 1997 – 17,518, 8th, 2.4 per cent market share
- 1996 – 16,201, 8th, 2.5 per cent market share
Source: Drive.com.au data centre.
The post VFACTS December 2022: Honda posts lowest sales on record amid switch to fixed prices appeared first on Drive.
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