Honda is here to stay in Australia, declares new boss

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After months of speculation that Honda might be planning its exodus from the Australian market, the Japanese brand has made a statement of intent with a significant restructure of its local outfit, operations and presence.

With a refreshed executive team, relocated and consolidated Melbourne head office – as well as a new central parts and distribution centre on the way – Honda Australia is putting rumours to bed that the company’s days Down Under are numbered, it says.

Headlining the management team reshuffle was the appointment of Honda Australia stalwart Carolyn McMahon late in 2022 to the top spot of chief executive officer (COO) and executive director, continuing 28 years of employment with the brand.

Alongside former COO and executive director Stephen Collins, McMahon spearheaded Honda’s transition to a nationwide agency dealer model in 2021, away from traditional dealer-buyer negotiations – a move that raised eyebrows at the time but one McMahon says is paying off.

“As the director in charge of that transformation we planned for everything except a pandemic,” she said. “There were some challenges but, essentially, we’re happy with where we’re at.

“The market has accepted the model, and our dealers are happy with the model.”

82 percent of Honda customers positive about dealer agency model

The controversial new model introduced a barter-banning ‘one price’ nationwide and a focus on high-end offerings with corresponding premium pricing aimed at simplifying the purchasing process, while enhancing the customer experience. 

Following a survey that spoke to more than 22,000 customers, the figures, says McMahon, don’t lie.

“75 percent advocate the agency model, 82 percent gave positive feedback on the one-price promise, and 84 percent of customers who buy a Honda only go to one dealership.”

McMahon also reported a 95 percent customer retention rate in the first year and 90 percent in the second, but the sales figures don’t read quite as easily as the customer satisfaction scores. 

While the ageing but still popular CR-V midsize SUV continues to prop up company prospects with just over 8100 registrations in 2022, the rest of Honda’s pared-back line-up, which includes the HR-V small SUV and Civic hatch, isn’t yet earning its keep.

HR-V, Civic still affected by poor supply in Australia

This, according to McMahon, is down to the same supply and demand disparity being experienced by all the mainstream brands.

“Covid-related supply is not allowing us to be exactly where we want to be with the volume,” said McMahon.

“I can’t say definitively when it’s going to be fixed, and there are so many factors – factory supply and port congestion. The positive thing for us is that the model is working and demand is where we need it to be. Our job is to secure more supply.”

Demand, says McMahon, is where the most green shoots are showing and order books are looking healthy. Once the supply problems are solved, the company is confident it can make its target of 20,000 annual sales.

“Our volume is tied to availability and we’re not immune to the challenges the whole industry has been having. What we are happy about is the demand for our product.”

New corporate structure and facilities in Victoria

And Honda is not planning on being caught blindside by the forecast increase in deliveries. In August 2023, the company will commission a new 22,000 square meter parts facility that centralises all Honda spare parts for Australia.

The significant investment goes hand-in-hand with a company strategy to consolidate marine, mobile power equipment, motorcycles and cars under one roof at an impressive new headquarters in Melbourne’s west.

200 Honda Australia head office employees will be accommodated at the 2200 square meter facility, including a refreshed and restructured executive, customer experience and public relations teams, marking the first move of its HQ in 40 years of Honda Australia history.

“Now is the right time for us to come back together again.”

With a regrouping of the broader Honda family, new facilities and infrastructure, and a fresh new team leading the way, McMahon says it’s a statement of confidence and commitment for the brand in Australia.

“When we were getting into the agency model, there was lots of talk about whether or not we were going to be here, were we leaving the market? But that was a strategic move for us to be here for the next 50 years. These new digs demonstrate that we’re not going anywhere. We’re here to stay.”

“Honda is not exiting the market”.