Honda Australia details agency sales, as new model takes force

Honda has flicked the switch and moved to an agency model in Australia.

The change came into force this morning (July 1, 2021), and has been described as “probably the biggest change” in the brand’s history Down Under.

The brand will sell cars through at 90 locations called Honda Centres, managed by 47 owners.

There are 30 locations in urban areas and 60 covering rural Australia. Before it announced the switch to an agency model, Honda had 106 dealers.

Along with the shift to Honda Centres, the brand is leaning harder on the web as part of its agency move.

A new configurator has been added to Honda Australia website, and the brand’s new “experience platform” will store vehicle information, allow owners to make service bookings, and keep track of their car’s history.

Honda Australia details agency sales, as new model takes force

“Many businesses outside of automotive have already realised an end-to-end customer experience that is simple, trusted and enjoyable, is the key to future success,” Honda managing director Stephen Collins said in a statement.

“Brand experience is the new competitive battleground, which is why we have shifted our focus from the auto industry norm of chasing volume, to prioritising a quality customer experience.”

No-haggle, drive-away prices for the range as part of the new agency model were revealed in June 2021.

Along with fixed pricing, the new plan will see the each of the first five services on every new Honda priced at just $125.

In most cases, that covers five years or 50,000km of driving. In the Odyssey, it covers two and a half years or 50,000km due to its shorter maintenance intervals.

The brand says the revised service pricing will save the average buyer around $1250.

Metallic paint and five years of roadside assist will be standard across the Honda range.

As part of the switch, Honda has pared back its range of cars in Australia, and will focus more closely on high-spec models.

The Civic sedan and Jazz hatchback will both die when stock runs out, while the City sedan and NSX supercar have already been axed.

Driving the brand are the CR-V and HR-V, along with the Civic hatchback.

A facelifted CR-V SUV touched down in 2020, and all-new versions of the HR-V and Civic have been revealed overseas.

The new Civic hatch will be arriving in Australia late in 2021, with the HR-V following not far behind it.

The Civic Type R and Accord will live on in supporting roles, while Honda has confirmed the Odyssey will stick around until its model life ends in 2022.

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What is an agency model?

Under the current dealer sales model, Honda Australia orders cars from head office in Japan (though most of its vehicles sold here are Thai-made) and sells them wholesale to individual dealers.

Each dealership is a franchise, and each owns its own stock.

Previously, when you bought a Civic from a Honda dealer, you were technically buying it from that dealer rather than from Honda Australia itself.

Dealers could negotiate with customers on price in search of a sale, and could compete with one another within the Honda network.

The change to an agency model means Honda Australia owns all its stock.

Dealers are no longer able to undercut each other on price – all cars instead wear a non-negotiable price tag set by Honda Australia, and dealers will be rewarded for each sale by head office.

Honda sales staff won’t be judged based on their volume. Instead, the focus will be placed on customer service.

Honda’s boss, Stephen Collins, has previously acknowledged for some people “it’s in their DNA to haggle”, and says the new model “won’t appeal to them”.

But he also points to internal research that says “a very high degree of people are, if not open to it, very positive about it”.