Honda Australia to shift to agency-style business model from 2021 – fixed pricing on new models sold

Honda Australia has announced that it will be restructuring its automotive business model and dealer network from July 2021. “We can’t sit still, the Australian market has seen 23 consecutive months of decline and every automotive business is rapidly changing,” said Stephen Collins, director of Honda Australia.

The transition will see the company shift to a new agency-style business model, with all stock being held by the brand instead of dealers. With this, Honda Australia will be able to set consistent prices for new vehicles across the country and eliminate dealer volume incentives, which in theory could make driveaway pricing more competitive.

Dealers will also become more like “agents,” receiving a fee from Honda to facilitate each vehicle transaction they make with customers. Honda New Zealand has already adopted such a business model in 2016, and was joined by Toyota New Zealand later in 2018.

For now, the exact number of dealers that will remain under the new model has not been determined, but in metropolitan areas dealers will have larger regions as part of a ‘hub-and-spoke’ network.

“The transition over the next 15 months will be a gradual process to allow our dealer network to fully prepare for the new business model. Honda Australia has just celebrated its 50-year anniversary; now is the time to take the necessary steps to seek to ensure the business and network are set up for the future and that our customers are with us for the next 50 years,” said Collins.

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