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Honda is reshaping itself from the high-revving sports car brand of the 1990s to a more mundane bread-and-butter brand in an effort to become one of Australia's top four by 2010.
In a move similar to that made by Toyota in the last decade, Honda has shed a number of under-selling models from its line-up and is chasing aggressive growth through its core models. Honda may also replicate Toyota's move with Lexus by bringing its own premium brand, Acura, to Australia, but not before 2011 at the earliest.
"Our goal is to sell 80,000 vehicles in 2010," Honda Australia's managing director Toshio Iwamoto told drive.com.au at the launch of the third generation CR-V 4WD earlier this week.
Honda's head office in Japan has set aggressive sales targets for the Australian subsidiary – 80,000 cars a year by 2010. Honda's sales have grown strongly from 30,817 in 2003 to 54,202 in 2006. Honda is currently Australia's fifth best-selling brand, and will likely cement fourth place behind Toyota, Holden and Ford if it achieves the ambitious 2010 target.
"We can do this with our existing models, but we could achieve this easier if we can fill a few gaps in our range. We can't increase volume without the right products."
"We definitely need a 5-door hatch in the small car segment. Look at the Toyota Corolla, the Mazda 3, the Nissan Tiida. Roughly speaking the hatchback makes up 50 per cent of sales. So we are not playing in 50 per cent of the small car market."
The Honda Civic has been a sales success for Honda since it launched in 2006, consistently racking up 1000 sales a month. A hatch could, Toshio believes, add 12-15,000 sales to Honda's current total.
But the Honda cupboard is bare. The only right-hand-drive five-door Civic hatchback is built at the Swindon plant in the United Kingdom, and exchange rates and tariffs would make it too expensive if imported to Australia.
Toshio has not ruled out a British Civic hatch, but says "it would be a low volume option only. Perhaps we [can] bring in a limited number of the high performance, 3-dr Type R model. I do not know."
Toshio is also considering building a more cost-competitive version of the Civic hatchback in Thailand to take advantage of Australia's free trade agreement. Thailand will have the capacity once the second production line is completed in 2008, but Honda is unlikely to green-light hatch production before Civic enters its next model life cycle in 2011/12.
Honda Australia currently sources 75 per cent of its range from Thailand, namely the new CR-V compact 4WD, the Jazz light hatch, Civic small car and Accord medium sedan.
MDX, NSX no future in Oz
Honda Australia has stopped importing the MDX prestige four-wheel drive, and has no plans for a replacement, says Iwamoto.
"We sold about 3000 [MDX] in four years which was good, but it is very hard to compete against the European brands like like BMW, Audi, Volkswagen and Volvo. We are trying to get a replacement for the MDX but it is very difficult. Japan does not take it, and we depend on Japan to help us build up an argument for right-hand drive."
A new MDX will be built, but only in left hand drive and only for the American market under Honda's premium channel, Acura.
Same for the all-new high-performance NSX replacement which Honda previewed in concept form at Detroit in January.
Honda is determined to establish Acura as a global player, the brand entered the Japanese market last year, and so is keen to protect Acura's uniqueness by not allowing any of its cars to be rebadged or sold through Honda.
For countries like Australia in which Acura does not have a presence, that means no MDX, no NSX replacement, no Accord coupe and no future Acuras – until Honda Australia hits 100,000 sales.
"We would need to reach 100,000 sales in Australia before we could consider bringing Acura in," said Toshio, "because we would need this kind of volume to support the Acura brand which would be a low volume proposition."
Iwamoto would like to do something sooner to give Honda back the performance reputation it established in the 1990s.
"We really miss the sporty models, the sporty reputation we had," Iwamoto candidly revealed to drive.com.au.
Honda built its reputation in the 1990s with a range of hot hatches (Civic VTi-R, Integra Type-R) and open-top sports cars (CRX, S2000) - and the revolutionary mid-engine NSX supercar that forced Ferrari, Lamborghini, Porsche and others to 'civilise' their own unruly supercars.
We need some spice in our range," Toshio-san told drive.com.au at the launch of the Honda CR-V in Tasmania earlier this week. "But it looks like, for a couple of years, we have to survive on bread and butter models."
