- shares

Honda Australia says it must turn greater attention to the problem of how to reverse lacklustre sales of its Civic small car, expressing a desire to claw back to about 2000 monthly sales — a figure long-removed from where it sits right now.

With the launch of its hyped new HR-V small SUV taking place this week, and new-generations of the Jazz, City and Odyssey now well-and-truly up and running and performing well (each led its segment in private sales in the second half of last year), Honda this week said its local focus must now turn to what has almost become its forgotten core model.

The goal is what must be called the remarkably bold sales target mentioned above, and this is taking into account the potential for the new HR-V to cannibalise some Civic sales.

"We’ve been doing it pretty tough with Civic,” Honda Australia director Stephen Collins told us, referring to the challenges of selling a vehicle in Australia’s most popular vehicle segment against high-volume models such as the Toyota Corolla, Mazda 3 and Hyundai i30.

Chief among the challenges is the tough exchange rate that is hurting its UK-made hatch in an uber price-sensitive part of the market — something Collins diplomatically called a “challenge” — and getting recognition and cut-through for its unloved (but sharply priced at list) Thai-made sedan.

Civic sedan

“I think the next priority for us is to really reignite Civic,” Collins said.

Consider these numbers: in 2014, Civic sales dropped 45 per cent to 7878 units, with the ratio split between hatch and sedan close to 50:50; Toyota and Mazda sold five-times that many Corollas and 3s, as did Hyundai with the i30/Elantra siblings.

It gets worse. In the first month of 2015 just 375 Civics found homes, down 56 per cent. The class-topping Mazda 3 knocked out 3903 sales by comparison. Civic's 2.1 per cent market share was lower even than the Subaru Impreza and Nissan Pulsar, and a quarter that of the Volkswagen Golf.

Collins said the company had to get the Civic’s volume back up to about 2000 units per month, or 24,000 per year, to really be at a place where the company would be happy. To be fair, these figures are not unheard of for the Civic, a nameplate with a storied history and with significant brand equity.

“I think we showed in 2013, we were doing about 1000 hatches a month, and I think when we launched the sedan (in February 2012) we were selling about 1000 a month, so I think that’s the sort of level where we’d be happy, and it’s the level that would put us amongst the key players in the small car market,” Collins said.

Civic update

Pictured: Updated MY15 Honda Civic due here by June

“But we’ve got to do a lot of things right… we’ve done it in the SUV segment which is probably the hottest segment… it’s the sort of level we have to get to.”

The CR-V was the nation’s fifth top-selling medium SUV in 2014 with about 11 per cent market share, behind the leading Mazda CX-5 (about 17 per cent share). As reported this week, Honda wants about 800 HR-V sales per month, enough to put it among its segment’s top-sellers.

Collins said the opportunities for growth came on both models, saying both had to fire if the brand was to have a shot at getting a sniff at the class leaders.

“We see the opportunity in both, the hatch market is still slightly stronger, but they’re both big, and we’ve got a history in certain generations selling lots of hatches, in other generations selling plenty of sedans,” he said.

“We need to be selling plenty of both… that’s what Mazda does, that’s what Toyota does… That’s where you need to be.”

Honda Civic Type-R Concept Photograph: James Lipman +44 7803 885275

Pictured: Civic Type-R concept

Collins added that plans to embark on this extremely bold plan were afoot. “We’re working hard on it,” he said, without giving specifics.

“We’re looking at every aspect of Civic’s price, the product, how we market the car… the first thing is get it on the shopping list… I think awareness of Civic is fantastic, it’s getting on that shortlist that is the challenge for us in the next 12 months and that’s what we’re working on.”

One thing we do know is that Honda will launch an updated version of the UK Civic hatch by mid-year, bringing a raft of changes though, given currency flows, potentially no positive movement on pricing.

It’s worth remembering Honda updated the sedan in July last year and slashed the starting price to a sharp $18,490 plus on-roads, which wasn’t enough to shake up sales despite making it the most affordable small car outside of Chinese-made models.

The Civic variant that every enthusiast wants, the Type-R hot hatch rival to the Golf GTI, is still fuzzier than the other hatch versions, with a clear timeline of its local launch still hard to pin down.

“Our priority is to get it as soon as we can, we source out of the UK now so I don’t think theres any massive logistical issues,” Collins said, though adding the launch could push into 2016 and — cryptically — perhaps further out still. Though surely this is unlikely.

“We’re working through many many different models, and I would like to confirm everything earlier sometimes, but it’s just the process,” he added.