Controversial ‘agency’ sales model with non-negotiable, fixed pricing will stay at Honda as the brand says feedback has been positive.
Honda Australia, which has transitioned from a dealer sales model to a fixed-price agency set-up, will stick to its current way of doing business despite consumer backlash at higher, non-negotiable pricing.
When asked by Drive what the brand’s sentiment on the agency model four years after the switch, Honda Australia Director of Autos Rob Thorpe said it is “very comfortable with the business model” it has in place.
However, while Thorp admitted there is room for improvement, he said customer feedback has been resoundingly positive.
“Like anybody’s business model, it is always open for improvement and optimisation, and we’ll continue to work on it and refine it,” Thorp said.
“But the fundamental premise of having a one-price promise in market with a clear value proposition regarding ownership experience – low-price service, roadside assist inclusive in the package, a warranty that can take you out to eight years – the full proposition of that, we’re very, very comfortable with.
“When we look at our customer feedback, a lot of our customer feedback suggests that they appreciate that its clear, simple and transparent.”
As part of the shift to the agency model, Honda slimmed down its vehicle line-up, ditching the Jazz, City, Odyssey, and NSX nameplates, as well as reducing its dealer footprint by about 15 per cent nationwide.
The sales model – also adopted by Mercedes-Benz Australia and Toyota New Zealand – sees the brand holding and owning all new vehicle stock in the country, with dealers acting as ‘agents’ and taking a cut of each sale for handover services.
Dealers can also handle scheduled servicing, which Honda caps at $199 for the first five services, or five years, for each of its new models, making the brand one of the most affordable in terms of maintenance in Australia.
For customers, it means there is no negotiation on prices – eliminating the variables like buying at the right time of year, or interpersonal skills – and old vehicles can still be traded in.
Thorpe said there are no immediate plans to grow its dealer network from the 87 outlets it currently has, even with ambitions to grow its overall volume in Australia.
However, Honda will rollout new ways for customers to transact online in the car-buying process, according to Thorpe.
“Later this year we’ll be launching what we call flexible purchase pathways online, which will allow you to fully transact and buy a vehicle online should you choose,” Thorpe said.
“But there are also pathways where you can go halfway and then go to a dealership; you can go to a dealership and go home and complete online.
“We’re actually going to be expanding it and adding more layers to it to ultimately find a way to make it simple and easy to transact with Honda.”
Tung Nguyen has been in the automotive journalism industry for over a decade, cutting his teeth at various publications before finding himself at Drive in 2024. With experience in news, feature, review, and advice writing, as well as video presentation skills, Tung is a do-it-all content creator. Tung’s love of cars first started as a child watching Transformers on Saturday mornings, as well as countless hours on PlayStation’s Gran Turismo, meaning his dream car is a Nissan GT-R, with a Liberty Walk widebody kit, of course.
