Honda’s Fixed Prices Set to Cause a Stir

March 16th, 2021

Comments Feed

After a long time coming, Honda is almost ready to pull the trigger on its plans to move towards an agency model in the Australian new car market from July. For a long time, the brand’s future was subject to speculation as some wondered whether it might follow in the footsteps of Holden and exit the local car market.

Nonetheless, despite its commitment to Australian motorists, not everyone is particularly pleased about how things are about to unfold. Let’s take a look at some of the changes that motorists can expect when the new model comes into effect from mid-year.

What can new car buyers expect?

As of July 1st, 2021, Honda is slashing dealership numbers and adopting an agency model. To many, this may not mean anything, however, for the dealers involved, the first thing is an expected hit to jobs, particularly given the lower number of showrooms and staffing requirements that ensue.

When you enter a showroom from July 1, you will be dealing with an agent of the Honda company’s head office. So whereas showrooms and dealerships were often operated by separate groups, now you’ll effectively be liaising directly with the parent company, although stock will be held by Honda Australia. Dealer agents will no longer be commission-based, rather, they will earn a fee from the parent company.

Because of these changes, however, prices are set to be fixed. That’s right, you heard it correctly. The days of haggling in a Honda showroom are set to be over, with the brand’s representatives recently even going so far as to say that negotiating the price of a Honda vehicle would no longer be a thing under any circumstances whatsoever.

If that wasn’t enough, new car buyers are also staring at reduced choice when it comes to the number of models available from Honda. The brand has cut its entry-level numbers and is prioritising SUVs, which is in line with the trend favouring SUVs of late.

What is the impact of this move?

Aside from the obvious, higher prices and less choice, the story isn’t over for new car buyers. There is also going to be more restricted levels of accessibility when it comes to servicing your Honda, which comes from the fact that a large number of Honda dealerships are set to fall by the wayside.

For Honda, naturally, its margins are expected to increase – and we’re tipping, quite handsomely. However, the brand has also gone on record to say that it not only expects but is ultimately pleased about the prospect that it will sell fewer vehicles across the Australian new car market.

A long-time favourite down under, and with many great names behind it over the years, it’s a shame that motorists now face an outcome where their choice, negotiating power and after-market support are set to be constrained.