Sales down but Honda gears up for million market just the same

Honda Australia CEO and Managing Director, Yasuhide Mizuno has labelled the marque's July sales performance "disappointing".

Speaking in an exclusive interview with the Carsales Network last week, the local Honda chief (pictured) said July was a "very tough and disappointing" month for company.

Honda sold 3566 vehicles in July, almost 2100 less than the same month last year and its worst sales month since April 2006. The sales drop accounts for the lion's share of its year-to-date July shortfall over 2007 -- 2939 cars.

Year to date the brand is 8 per cent down on last year. Its archrivals Mazda and Mitsubishi are 7.5 and 1.3 per cent ahead of 2007 for the same period. And one of Mizuno's "brands to watch", Volkswagen, might have sold just over half as many cars as the Big H so far in 2008, but it's almost 18 per cent ahead of its YTD total compared to 2007.

"I think most of the reason [for our poor sales in July] was too much pull forward [of sales] into June, but also the economy -- consumer confidence has sharply dropped," Mizuno told the Carsales Network.

"In usual seasonality -- June and July -- July is slightly lower, so we can't avoid dropping sales, however, we never quite expected there to be such a huge drop. I think the consumers' feeling and their confidence has been much more deeply influenced [than we expected] by the economic -- well, not crisis -- but toughness," Mizuno opined.

"Even the government support [for the economy] via income tax reduction... At this moment we can say it doesn't work so well."

Mizuno says he remains concerned about the overall automotive market in August and September and says interest cuts may be necessary to restore some confidence.

"Seasonality suggests that August I think is slightly better than last month, but towards September and October they may continue to the same situation [to lose sales momentum.]

Honda's fortunes Down Under are still largely linked to private sales, though the maker is resourcing its sales infrastructure to target user-chooser fleets (more below). Mizuno says both Honda's Euro (pictured) and the Mazda6 are key indicators of the confidence of private buyers and is watching their respective performances keenly.

In July the new Honda midsizer logged 894 registrations -- almost 200 up on the outgoing model at the same time last year. It also outsold its traditional foe, Mazda6 by over 120 units.

In contrast, the Mazda was down 150 units on the same month last year. Volume borne of its recent price reductions (more here) is yet to hit the statistics. Nonetheless, the successful run-out of the model by Mazda earlier this year still has it well up on YTD totals.

In spite of the tougher economic circumstances Mizuno-san says Honda Australia is confident it will post a strong year overall.

He cites the launch of the new Jazz later this month as a key factor. He is also confident that the dual-pronged Accord and Accord Euro offering will perform well for the marque. Other important new models are just around the corner, he says.

And the Honda boss remains confident the Australian market will again top the million vehicle mark this year

"Towards June the expectation was almost 1.08-something, now we're looking at over one million but closer to 1.01 to 1.02 is the current prediction," Mizuno stated.

"Private buyers are still down so I think [the final number will be] supported by the business fleet. One million last year and one million this year, but it might be a different story [behind the totals]," Mizuno mused.

As such, Mizuno is moving Honda Australia into the realm of Toyota, Ford and Holden and targeting fleet sales. Well sort of... Don't expect to see rows of white Euros at your local Telstra depot just yet -- it's the lucrative user-chooser market Mizuno's team is targeting.

"This year we've moved to cultivate the business fleet market. We've started to build a sales organisation [targeted at user-chooser business] and we've staged a number of events including a fleet program built around Honda F1 driver Jenson Button," Mizuno explained.

Honda believes the establishment of an infrastructure aimed exclusively at user-chooser fleet sales is a local industry first. Though he admits the process hasn't been without challenges.

Still a 'work-in-progress', he says his company's fleet division will be making a worthwhile input into the maker's sales totals within "a couple of months." Ultimately, Mizuno says the user-chooser market focus should deliver up to 10 per cent growth across the Accord, Euro and Civic model lines, he says.

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