Honda fixed pricing for new cars starts in Australia from today

From today, Honda customers will not be able to negotiate on price when buying a new car after a radical overhaul of its traditional business model.

Under the restructure, Honda has reduced the number of dealers nationally from 105 outlets to 90.

Some outlets have separated their showrooms and service centres, while the company will also experiment with “pop up” stores in shopping malls.

The prices of most Honda cars have risen under the new arrangement – by between $251 and $977 – and the company has taken the opportunity to axe some of its more affordable models.

The Honda Civic was last year available for as low as $24,990 drive-away; the revised range starts with a better equipped model priced from $31,000 drive-away.

Although the prices are higher than before in most cases, the drive-away deals include metallic paint across all models (rather than selected models), and includes “premium” roadside assistance for the duration of the five-year warranty.

The price of servicing has been reduced to $125 for each of the first five visits – slashing costs by up to two-thirds to make Honda the cheapest for routine maintenance among mainstream automotive brands in Australia. 

Under the new arrangements Honda dealers will become selling agents who earn a flat fee per new car sold and will not have the flexibility to negotiate on price unless they’re prepared to surrender some of their own commission.

Dealers will have cars on display and for test drives, but the inventory will be held by Honda Australia who will assign vehicles to customers as orders come in on a first-come, first-served basis.

Previously, dealers would need to negotiate with another showroom to source an in-demand car if they did not have stock. Not all dealers are obliging in such scenarios.

According to Honda “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 and shop around to find their preferred vehicle.”

A statement issued by Honda Australia today said: “No more haggling or shopping around for the best price. With the Honda Price Promise you’ll always pay the same price for your new car no matter which Honda Centre you visit – with all drive-away costs included.”

The statement continued: “You’ll pay just one price, before adding any accessories, wherever you go, with no pressure to buy. We believe it’s a much more transparent and enjoyable way to buy a new car.”

Industry experts had foreshadowed price rises under a fixed-price sales structure.

German car maker Mercedes-Benz is poised to introduce fixed pricing in Australia from 1 January 2022.

Volkswagen-owned brand Cupra is expected to follow a fixed price business model when it arrives in Australia next year, but this is yet to be confirmed.

Meanwhile, Honda says it will also experiment with “pop up” stores in shopping malls, starting with a temporary space at Indooroopilly Shopping Centre in Brisbane, before moving into the AutoMall facility inside the centre, which is due to open at the end of this year.

The Australian Competition and Consumer Commission (ACCC) says it is monitoring the rollout of the new fixed price business model, but CarAdvice understands there are no laws preventing the introduction of direct sales.

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