Hatching a Civic plan

Here's a conundrum, Honda Australia imports a brand spanking new hot hatch variant to fill out its Civic range. It's priced above two logical -- and highly regarded competitors -- and Honda admits that even then there's not much profit in the exercise.

Why do it then? Honda Australia -- without a sporting three-door hatch Civic since the demise of the old 'EK' series (pictured) in 2000 (and with no five-door hatch in the latest generation) -- is using the Type R as a 'halo' car. But for what? Is the Type R (more here) a car to whet the appetites for something similar with decent dynamics and a bit of styling flair at a significantly lower cost?

Honda's Thai facility doesn't build a Civic hatch, nor does Japan. Honda in Britain does, but the landed cost in Australia is prohibitive, says the manufacturer. For one thing, the cost of doing business in Thailand is cheaper and then there's the free trade agreement between us and the Thais, which means Civics built in that country escape 10 per cent import duty.

A basic hatch sourced from Britain could cost as much as $6000 more than the entry-level Civic sedan. This would normally lead to a repeat of the situation where the five-door hatch in the previous Civic series came in from Japan and the sedan came from Thailand.

There are actually two problems with sourcing a basic three-door or five-door Civic from the British plant. Firstly, there's the landed cost. The strength of the Euro/British Pound makes any car sourced from Britain almost as expensive as one from Japan. And that's before the extra 10 per cent import duty kicks in compared to the current sedan range from Thailand.

Secondly, the Honda plant in Britain cannot satisfy current demand. While additional capacity will come on line at Swindon by the end of 2008, the cost issue is a harder nut to crack.

Consider this though, there was an unusually large contingent of British-based Honda representatives at the recent launch of the Type R. Why would that be for a car which is not expected to sell more than 100 units a month locally?

Our guess is that Honda Australia is working hard to massage the figures. And if that's the case -- expect a non-Type R Civic hatch here by early 2009.

We'll be watching... Along with Mazda, Peugeot, Volkswagen and others...

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