Four things Honda needs to fix so its 2026 Honda CR-V, HR-V and Civic can sell better against Toyota RAV4, Hyundai Kona and Toyota Corolla

Honda has a range of vehicles that has rarely been better than it is today.

Outside of normal advances that makes every new model safer, cleaner and better equipped, in every measurable metric including for value, driving dynamics, ride comfort, warranty, servicing costs and efficiency, 2026 Hondas generally eclipse their 1980s to 2000s brand-heyday predecessors.

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So, why were sales still languishing at around 15,000 units last year when comparable rivals, Volkswagen and Subaru, shifted about 40,000 vehicles each, Mazda 90,000 and Toyota 240,000?

In the late 2000s, it was aiming for 80,000 annually. What happened? We pitched this question and more to Honda Australia bosses.

Fixing ‘Hondas are too expensive’ perception

Since shifting from recommended retail pricing to the highly-controversial no-haggle/drive-away pricing 'agency model' in mid-2021, the perception is that its vehicles are now too expensive.

Losing the entry-level Jazz light car from the low $20,000 mark did not help. Suddenly, the cheapest Honda was the previous Civic from $31,000 in runout, jumping to $45,000 when the next-gen model appeared for 2022. Ouch.

The thing is, every single established model, especially the HR-V, Civic and CR-V, have taken big strides in adopting big generational improvements ever since. And, factoring in equipment levels, rivals like Toyota, Mazda and Volkswagen did close the gap with Honda. A key example of this is the HR-V hybrid from $39,900 drive-away.

“For us, and ever since we've transitioned to this (agency) model, the simplicity and the transparency for the customer has been paramount,” according to Honda Australia Director, Rob Thorp. “(These) trump some of the other gimmicks or methods that others maybe choose… it doesn't work for everybody, but for us, that premise is just core to how we want to go to market.

“OK. People may have a different view. But we're very firm in the simplicity and transparency aspect.”

Smarter marketing

Honda admits its marketing has not been good enough to achieve the sales it wants.

But Honda Australia President and CEO, Jay Joseph, does not believe that the agency model is to blame.

“I would flip your question around, and I respect the question, but I would say, actually, we need to do a better job, explaining to the public, to our customers, the advantages of (agency) one price,” he admits.

“Some people think no haggling means, ‘Oh, that means you're just not giving me anything’, but the real advantage is, actually, we're promising you that everybody gets the same price.

“You'll never be embarrassed at a barbeque when your neighbour says, ‘Oh, you paid that? I paid this much less’. That won't happen, because we've made that commitment to the buyer.

“So, actually, once, if we do a better job, explaining that, I think we're protecting them better than anything else.”

Boosting sales

According to Thorp, better sales results are coming.

“We agree with you that, when we look at our current line-up… they all deserve more than what they're currently generating,” he revealed.

“But we know that in this current environment, it's just not easy to just lift your volume. It does require all parts of the business to be working harmoniously.

“So, whether that's through our network or through our marketing and advertising, through the pricing of the product launches that we have now, all that has to work harmoniously well.”

But Thorp says there is no going back.

“Last year, we were able to grow 10 per cent year-on-year in a market that's pretty flat and the competition is pretty intense,” he said. “And this year, we're also looking for ongoing sustainable growth and are on track to deliver another 10 per cent as well.

“So, we know that there's opportunity for us to expand our volume and our growth, but we also keen to do it in a very sustainable way.

“You know, certainly we could discount and damage the brand to achieve that volume growth, but that's not what we want. We want it in a sustainable way, in a way that works for us, for our network, but most importantly, for our customers.

And we think our strategy will deliver on that.”

Greater visibility

Honda Australia went from over 105 dealers to 75 sales sites since 2021, prompting critics to point to a lack of visibility for consumers who otherwise shop elsewhere.

“Brand presence is certainly a factor (of our lower sales)," Joseph admits.

“And we won't dismiss or discount that.

“As we grow volume, one of the things that we're looking at is, ‘do we have the network necessary to deliver that?’ Is it time for us to grow? That’s one of the questions we talk about.

“But that's not how people shop. People don't begin shopping in a dealership anymore. They begin online.

“So, really, over the last two years, and this predates my time in the last 14 months, we've been rebuilding a brand, marketing and sales machine, that works together.

“Putting those pieces together that Rob (Thorp) was just describing, so that we have a system that works to attract people.

“If you think about our jobs, it's actually pretty simple. We're just supposed to be matchmakers. We're supposed to deliver a product to a location where it can be sold, and we're supposed to drive consumer traffic to that location. Now that location happens to be more online now, and we've just put the pieces together for people to conduct those transactions online.

“We’re getting some traction with that, we're seeing the result of it, and now we've got new product coming in on top of that.”