Honda’s local boss believes the intensely competitive nature of Australia’s new car market, with around 80 brands vying for a relatively small audience, will inevitably see some car makers depart.

“Yes, I don’t think it’s sustainable to have so many manufacturers, especially when there are too many [of them] that are out at the margins,” Jay Joseph, President and CEO of Honda Australia (main), told WhichCar by Wheels at the launch of the new CR-V (below).

A veteran of Honda in the United States, Joseph reiterated the significant difference between a market that supports 42 brands competing for 16 millions sales, and the Australian market with “a much smaller pie [and] much smaller pieces”.

“There are too many who have dropped below one per cent of market share,” Joseph told WhichCar by Wheels. “And the network would be very hard to maintain at those low levels.”

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Joseph went on to explain that you can potentially get customer’s attention at those levels if you’re a low-volume, high price manufacturer like Ferrari, Aston Martin or Lamborghini, or if you’re selling a low volume at a very cheap price. But, when you’re competing in the middle of the market, it’s unsustainable.

“There could be a niche for a company at low volume, low price for example,” he said. “The middle, though, is where it’s tough. So if you’re competing in the mainstream and you’re not able to increase your pricing because it’s such a competitive market, that’s a tough place to be, so I don’t think everybody can survive.”

In the United States, Joseph explained that Honda takes reliably 10 per cent of new vehicle sales, with strong awareness in the market and that’s been the case for quite some time.

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“Coming here was eye-opening, I very quickly realised that it’s a very different market to the United States,” he said. “While it’s a much smaller pie, split into much smaller pieces, that’s not even completely true, because Toyota takes 20 per cent, so one player takes a huge chunk of the pie, but then you’ve got Mazda and Ford at nearly 10 per cent each.”

Joseph went on to explain that when you factor in the top 10 brands, 60 per cent of sales go to the top seven. “The other 69 players then duke it out over the remaining 40 per cent of sales, so that’s completely different to the United States,” he said.