Never shy to announce bold targets, Honda Australia has stated a goal to get back to the magic 60,000 sales mark by 2018 — almost double where it sits today.
The stretch target, based on bold plans for the HR-V; expected three-fold growth from the ailing Civic; and continued form from the Jazz, City and Odyssey, would see Honda almost double sales over a period where it expects the market to grow only moderately at best. The ‘poach’ is on, then.
The company achieved the 60,000 figure in 2007, when it outsold the likes of Nissan and Hyundai, companies that doubled and tripled its 2014 sales figure respectively.
Between then and now Honda’s sales have steadily eroded, with a number of factors — supply constraints a few years ago that started the rot, currency issues and high prices, a dilution of its product offerings, and less-competitive service schedules — all blamed for the decline.
Whatever the reason, Honda Australia director Stephen Collins came out swinging this week at the launch of the model that will drive much of this proposed sales growth — the HR-V crossover.
“It [60,000] will be within the next three [years], so whether it’s ’17 or ’18 is still to land on, but as you know we were there in ’07, so I think it’s rightfully at a minimum where we need to be, but I think we need to build it back,” Collins told us.
Collins also told us exclusively a few weeks ago that Honda was targeting 40,000 sales in 2015 (up from 32,998 last year, when it barely beat out Mercedes-Benz to stay in the top 10), thereby returning it to its 2013 volume.
This is step one in the mooted ‘build back’.
Honda announced this week its plans to net about 800 HR-V sales over each of the next 10 months, and that it expects little cannibalisation between that car and the larger CR-V and it struggling Civic.
If this ambitious target comes to fruition, the addition of circa-8000 units of volume would get it to about 40,000 even if everything else stood still or dipped marginally.
Furthermore, Honda had a stronger second half to 2014, with its new (released over that year) Odyssey, City and Jazz all leading their segments in private sales over the period. It now has a full year of sales for these cars ahead, offering an additional boost prospect, though the Odyssey particularly will have its hands full with the new Kia Carnival.
The company grew its volume 9.4 per cent in January, despite a colossal 56 per cent drop for its Civic which managed a measly 375 units on the back of disadvantageous currency flows hurting the UK-made hatch model’s price.
The company expects to turn around the Civic, outlined to us this week as a top priority, with three-fold growth expected in time. If it gets to where it intends to over the next few years (a figure of about 2000 monthly sales), this would add about 16,000 units of annual volume over the 2014 numbers.
Should Honda make these (extremely bold) mid-term targets, the 60,000 figure comes into view. The challenge is doing it, something we’ll keep an eye on. For context, a hypothetical figure of 60,000 sales in 2014 would have taken Honda past Subaru (40,502) and Volkswagen (54,801) and into seventh place, behind Nissan (66,025). This isn't the first time Honda has set itself bold sales targets either, with Collins claiming in May 2013 that the company was aiming to reach 60,000 sales by this year.
As mentioned, Honda Australia expects to push for this target within a total market growing only slowly, meaning it had better pull on its armour and prepare to conquest from other brands, leveraging decades of equity.
“Our view is the market this year is going to be flat, and then in the… next 2-3 years we think maybe 2-3.5 per cent growth in the market,” Collins said.
“The major change in that will be a shift in the segments, our view is that downsizing is going to continue, so it’ll be large SUVs going into medium, medium into small, a bit like what’s been happening with passenger cars.
“I think in a mature market we will need to be getting sales from other brands, so I think that gets down to new cars in new segments… we’ve shown with Jazz, City and Odyssey in the past year that when we get it right we can do good numbers.”
Read our Honda HR-V review and watch our video here.