Honda Australia launches new business model

Honda Australia has taken the first step in what it describes as a “bold new journey” to lead the automotive industry by revolutionising the new car buying experience in Australia. This includes a revamped network comprising of 90 Honda Centres across consolidated larger geographic areas, centralised marketing and stock management, and a ‘one price promise’ that delivers certainty of price.

“We embarked on a transformation journey over 15 months ago to create an enhanced, consistent and premium Honda brand experience for our customers and Honda representatives. Today marks an exciting new chapter for Honda Australia, as we officially introduce our new business model to the Australian market,” said Stephen Collins, Director, Honda Australia.

“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. 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.”

“Restructuring a business is not easy – transforming a business is doubly hard, as it involves changes to everything we do. But our founder, Soichiro Honda, once said: ‘Instead of being afraid of the challenge and failure, be afraid of avoiding the challenge and doing nothing’,” added Collins. “Our entire team has worked tirelessly over the past 15 months to create a new chapter for Honda in Australia. We’re making it simpler for customers to choose Honda and easier for our network to make that happen.” 

The key elements of Honda’s business transformation are:

• A priority focus on an enhanced customer experience and customer retention, by providing simplicity, good value and a hassle-free buying and ownership experience
• A Honda Price Promise to customers that they will pay the same price for their new Honda vehicle across the Honda Centre network, in all locations around Australia
• A simpler and more flexible operating model for Honda’s network with different types of retail representation
• A streamlined product line-up based on customer preferences, market trends and growth segments for the Australian market

According to Honda, the revamped representative network is a key component of the new business model and central to the company’s long-term success in Australia. The physical representation of the Honda brand is very similar to the previous network, with 90 Honda Centres around Australia providing an extensive national footprint for the 200,000 customers currently within the Honda network.

With 30 Honda Centres across metropolitan areas and 60 covering provincial and rural areas, the revamped network is the right size to support a sustainable business for Honda Australia, based on the planned volume of around 20,000 vehicles annually.

Management of the new network has been consolidated to 47 owners, which Honda says promotes operational and cost efficiencies, as well as easier integration and strategic alignment.

“The revamped Honda network has been carefully considered and planned, allowing us to maintain optimum network flexibility, while ensuring it was the right size to meet customer expectations and deliver outstanding experiences for our customers,” said Collins. “We’ve also maintained Honda’s provincial and rural network, which is critical for customer convenience, warranty repairs and availability of Honda products.”

A new Honda Centre is operating from a temporary space at Indooroopilly Shopping Centre in Brisbane, before transitioning to the main AutoMall facility at the same site when it opens towards the end of the year.

The new site is an interactive retail space showcasing the ‘Joy of Honda’. Also under construction at the same location is a multi-brand service centre on the roof-top carpark, which will enable customers to have their vehicle serviced whilst shopping. 

One Honda Centre owner has chosen to separate sales and service into different locations to better satisfy customers in that area. These are the types of new ways Honda is supporting its network partners in implementing a sustainable business model for the future.

Honda representatives act on behalf of Honda Australia for the sale of new Honda vehicles to customers, with Honda Australia owning all-new vehicle stock, as well as all display, test drive and service loan vehicles required in each Honda Centre.

All of the available new vehicle stock is also managed by Honda Australia and housed in central locations, rather than being scattered amongst different Honda Centres. Honda says this will make it easier and quicker for customers to get the vehicle they want, in the colour and grade they want, rather than having to go from one site to another to find their preferred vehicle.

An online vehicle configurator is one of the major changes to Honda’s corporate website, which offers customers a simple and engaging way to view vehicle information and pricing, as well as ‘build’ the vehicle they are interested in purchasing. The configurator will feature all models, grades and variants, along with features, offers, options and accessories, all with transparent pricing.

The customer portal allows owners to digitally manage their vehicle and connect with Honda throughout the ownership journey.

The Honda Price Promise means a customer will pay the same national drive away price for their new Honda vehicle, regardless of which Honda Centre they visit. The new vehicle price is also the same regardless of paint colour, with metallic and pearlescent paint colours included, if chosen by the customer. The only items not included are Honda Genuine Accessories.

Each new Honda comes with a five-year unlimited-kilometre warranty and five years of premium roadside assistance as standard.

Honda Genuine Accessories provide customers with the opportunity to personalise a vehicle to suit their needs and lifestyle. Given that is very much a personal choice, accessories will continue to be offered as a separate component of the new car buying process.

To further enhance the ownership experience, new ‘Accessory Packs’ are now available to new and existing Honda customers. A choice of three accessory packs – Essentials Pack, Style Pack and Premium Protection Pack – brings together individual accessories in combinations to complement a customer’s lifestyle.

Honda says the RFRP of an accessory pack is 20 per cent less than the combined total RFRP of the individual accessories.