Honda details fixed-price model coming Down Under

Honda Australia has revealed more details of its new fixed-price model which are due to come into effect next month.

From July 1, the Japanese marque will switch on nationwide one-price driveaway pricing, standardising the cost of a new vehicle no matter where in the country it is being sold or how nicely you ask for a discount.

The new pricing structure is part of the carmaker’s new ‘Honda Price Promise’ business model, which includes a reduction in dealerships and changes to its new car warranty and roadside assistance packages.

Under the new business model, the previous manufacturer’s list price (MLP) has been replaced with a national drive-away price, which includes all on-road costs and statutory charges, as well as metallic or pearlescent paint colours which were previously added extras.

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2020 Honda Accord

The only items not included in the new vehicle price are any Honda Genuine Accessories selected by the customer to personalise their vehicle.

Every new Honda vehicle purchased from July 1 will continue to come with a five-year unlimited kilometre warranty as standard, but it will now also include five years of premium roadside assistance, which was previously only available to customers as part of the cost option extended warranty package.

“All our research shows one of the most common pain points associated with the purchase of a new car is the need to negotiate and haggle on price,” said Stephen Collins, Director of Honda Australia.

“Under our new agency model, this will no longer be necessary to determine the price of a new vehicle, which is a significant change for Australians who have been trained to buy new vehicles by negotiation.

“We know this new way of buying a car won’t be for everybody, but we are confident it will address the needs of the vast majority of new car buyers, while delivering a more relational, less transactional experience.”

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2021 Honda Civic Type R

It's a dramatic business model restructure more than 12 months in the making, introducing the most significant transformation in Honda Australia's history spanning more than half a century.

The 2021 strategic plan will go live on July 1 this year, revealing the work of 150 Honda Australia staff and a complete top-to-bottom remodelling of local operations which Honda promises will improve customer experience, streamline operations and overhaul the national dealer network.

It follows an announcement in March 2020 that the Japanese brand would start the transformation process, stripping back underperforming models, culling marginal dealers and preparing the ground for change.

Speaking at the announcement of the strategy in March, Mr Collins said the company was introducing a fresh culture that places a greater importance on the image and perception of the company – and not outright sales.

“We’ve spent the last 12 months re-engineering everything in our business,” he said. “Our customer experience right now is pretty good, but the intent is to take it to a new level and take up a leadership position in the auto industry in terms of a transparent and seamless process for buying new cars.

“We’re shifting from a volume-driven business to what we call a ‘quality business’. This is about prioritising the customer experience and not being obsessed with chasing volume.”

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2021 Honda Odyssey

Key to the new-look Honda is a complete reimagining of the dealer network and the introduction of a ‘hub and spokes’ model that retains existing major dealerships in metropolitan centres which, in turn, serve smaller outlying operations in suburban areas.

The hub-and-spoke model addresses inefficiencies in the Honda system resulting in flagship bricks and mortar where high traffic warrants it, and leaner outfits that could include lite dealerships that may only have a one-or-two car showroom or just a service centre in some cases.

Almost as significantly, Honda Australia will introduce the decisive move to own all vehicle stock in the national network, including showroom cars, demonstrators and service replacement vehicles.

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2021 Honda HR-V Luxe

This, says Collins, reduces risk the dealer previously had to shoulder as well as allowing the customer to get the exact car they want as quickly as possible, rather than making a round peg fit a square hole with existing stock at the dealership.

And while the company slashed a number of models and variants from its ranks at the start of 2020, the new strategy includes a complete audit of the current line-up and the introduction of fresh metal.

“Our aim is to bring good and exciting products to the market,” said Collins. “One of the things we’re looking at is our sourcing strategy and there may be options to source more product from Japan or elsewhere that might open up opportunities.

“I’m very confident we’ll be bringing the great products – not all of the ones available globally and unfortunately there’s no pick-up on the horizon, but there is much more opportunity.”

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2021 Honda CR-V

When the big plan goes live in the middle of the year, little will change in appearance at the network of dealerships around the country aside from some “subtle changes”.

In the run up to July, customers can expect to see a handful of smaller metro dealers close their doors, while new Honda signs will be erected at other locations including shopping centres such as AutoMalls Brisbane Airport and the Indooroopilly Shopping Centre.

In all, the existing network will be slightly trimmed from just over 100 to about 90. No changes are expected in rural and regional locations.

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Honda Clarity Hydrogen will cease production from March 2022

Model range pricing

Honda Civic five-door

VTi-S – $31,000

VTi-L – $34,900

RS – $39,600

Honda Accord

VTi-LX (1.5L Turbo) – $57,400

VTi-LX (2.0L Hybrid) – $60,400

Honda Odyssey

Vi L7 – $48,700

Vi LX7 – $56,000

(Dropped from Australian line-up as of 2022)

HR-V

VTi – $31,300

VTi-S – $35,100

RS – $38,500

VTi-LX– $41,000

CR-V

Vi – $35,300

VTi – $38,300

VTi 7 – $40,300

VTi X – $41,200

VTi L AWD – $45,500

VTi L7 – $48,700

VTi LX AWD – $53,200