VFACTS December 2022: Honda posts lowest sales on record amid shift to fixed prices

Honda Australia posted the lowest new car sales on record in its first full year of fixed non-tradeable prices.

The Japanese car giant, which was in the Top 10 for the previous two decades, has slipped to 19th place and now accounts for less than 2 in 100 new cars sold in Australia.

The stunning fall from grace comes later Australia chose to reduce the number of showrooms nationwide, modernize its model lineup, and introduce non-negotiable flat prices for new cars from July 1, 2021.

The former head of AustraliaStephen Collins, who was instrumental in turning the controversial business model around, 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 released today by the Federal Chamber of Automotive Industries (FCAI) show that Honda reported 14,215 new cars sold in 2022, the lowest number since the organization collected data from the late 1990s.

It’s also the lowest market share on record for Honda in Australia, with official data showing just 1.3 per cent of new car buyers bought a vehicle from the Japanese brand.

Historically a Top 10 brand, Honda slipped to 19th in Australia’s new car sales charts in 2022, after falling to 14th the year before.

When it launched the switch to non-tradeable fixed-price models, Honda Australia said its plan was to make more profit from each vehicle and sell fewer cars.

This approach, coupled with rising production and shipping costs in the wake of the global pandemic, caused Honda’s new car prices to 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, several Honda dealers have said To drive The move to non-negotiable fixed prices has drastically reduced the number of new cars they sell, reduced the number of trade-ins, reduced the number of financing opportunities, and has also taken a toll on their service and parts departments, all of which contribute to its profitability and overall viability.

Despite the slump, which cut 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.

Source: Drive.com.au data center.