Honda’s Civic ambitions – Fleet Voice
Wednesday 22 November 2011. Fleet Voice Column.
Honda has big ambitions for its new Civic hatch, which has just been launched and will arrive with the first UK buyers in February.
It was hoped to deliver the first cars in January, but the recent floods in Thailand have disrupted the supply chain and necessitated the four-week delay.
This highlights the fragility of modern automotive world and its global nature, but it also shows Honda’s commitment to getting the Civic on the ground in the UK despite the problems of the past year that have seen Japanese firms endure an earthquake and tsunami.
That commitment to the Civic from Honda is underlined by expected sales of 25,000 in the 2012 in the UK, followed by 30,000 in 2013.
However, Honda goes even further and expects to find 32,000 eager buyers for the new Civic in 2014 and many of them will be company car drivers.
The reason for the ever-upward sales graph is partly down to the new, ninth generation Civic broadening out its talents.
Yes, it’s still a great looker, but now it’s more refined, quieter, smoother riding and offers even more luggage space while finding a bit more room for those in the rear seats.
All of this is on top of Honda’s relentless pursuit of any extra advantage it can gain, epitomised by the tiny plastic winglets either side of the 2.2-litre turbodiesel model that reduce aerodynamic drag by 0.1Cd and consequently lower carbon dioxide emissions a smidgeon.
Honda drafted in some of its engineers who used to work on its Formula One project to help with the Civic’s development. That kind of engineering input is invaluable and incalculable when it comes to exploiting tiny margins.
New engine
However, the real reason Honda expects its sales to take a northerly trajectory over the next three years is the impending introduction of its new 1.6-litre turbodiesel for 2014.
This new engine will have carbon dioxide emissions of less than 100g/km, though Honda is remaining very tight-lipped and inscrutable about exact figures so far ahead of the engine’s introduction.
No matter, this engine will easily be the pick of the range for company car drivers and will bless Honda with a tax-efficient, low emissions engine the Civic range has been crying out for.
Even so, Honda has relatively modest ambitions for fleet sales of the Civic, estimating company cars will account for around 10,000 of those 32,000 total sales in 2014.
Phil Crossman, General Manager of Cars, Honda UK, explains: “Fleet is a key market for us, but we want to grow in this area in a structured fashion.
“It’s a bluechip business and carbon dioxide emissions is vitally important, so the new 1.6-litre turbodiesel is key to our ambitions in this sector.”
Good feeling
With the introduction of the new Civic model imminent, Crossman is also aware of the importance of feeding the new model into the business market in the correct way to avoid damaging the historically very strong residual values of the Civic.
“We need to make sure lead times and rental prices are at the optimum point, balancing fleet with retail to make sure the mix is right for us,” he adds. “Honda is not a direct competitor for the likes of Ford or Vauxhall in this market, though we do go head-to-head with them in the retail sector.
“Fleet is a constantly moving and very competitive environment, especially at the moment as the financial pressures of the business world are dictating ever more long reaching decisions on fleet managers. I have a very good feeling for Honda because of this, but we need to make sure the offer is right to attract not just fleet customers, but the right fleet customers.
“This means we will not be looking to the daily rental market, though we are dealing with the larger lease companies. Honda is not chasing market share in the way some of our rivals are as we are adamant that our position within the market, both retail and fleet, is completely sustainable.”
To this end, Crossman is not averse to looking at bringing elements of the retail world to the fleet sector and vice versa.
He says: “We know service packs are hugely popular with private buyers and this is a great source of used cars for our dealers. I’m a big fan of these packages, so there is an opportunity to take this sort of package into the fleet world.
“The other great element about service packs, as we’ve seen with retail customers, is there is approximately a 15% higher retention rate among customers who choose these service plans. Fleet and retail customers both like fixed price servicing as it helps them budget much further in advance, which is a big consideration in time of uncertainty.”
Attitude change
Crossman notes that customers in every area are prone to cut their financial cloth to suit their means when money is not as easy to come by.
“People will avoid servicing or select the most pressing work required,” he says. “The car trade needs to catch up on fixed price service deals. Servicing is often seen as a distress purchase by customers.
“Honda wants to change this attitude to something more akin to what we see with our motorcycle customers. What we see here is customers regard the dealer as a friend rather than someone to treat with suspicion.
“Of course, some of this comes from the different way motorcycling is regarded compared to cars where biking is a leisure pursuit, a sport and a hobby where owners see spending money as an investment in their pleasure and enjoyment.
“It’s a long way off for car dealers to achieve this level of interaction with customers, but there’s no reason it cannot be done. I believe Honda has the right products and customers to make this happen with car owners where they just pop in on a Saturday morning for a coffee and chat, with no pressure to buy anything.”
Ambitious
Given Honda’s attention to detail and commitment to the new Civic, there’s every chance the company will get to this point.
As for fleet buyers, it may take longer for the arrival of the new 1.6-litre turbodiesel engine, but it could make a welcome and interesting change to see your dealer as a friend rather than just someone to service and valet the car every few thousand miles.
It’s ambitious on Honda’s part, but then nothing was ever achieved without ambition.
Alisdair Suttie
See also:
No comments yet
