Honda cuts fleet dealers to grow corporate sales
12 February 2015
Honda has cut its corporate dealer network from 45 to 12 sites in order to concentrate its small to medium business with those retailers that can "do the job properly".
The medium-term plan described by Leon Brannan, Honda UK head of cars, is to steadily increase total sales in the UK from 55,000 to 60,000 and then 80,000 in the next three years. The company needs its SME sales to perform to make that target.
Brannan told BusinessCar the Japanese brand had been through a challenging period, which saw its total sales slip by 3.8% last year to 53,544 units and Volvo and Renault overtake it in the fleet market.
However, he is confident the brand will recover due to replacing its 2.2-litre diesel with a sub-130g/km 1.6-litre unit, which comes in two power guises.
Honda will see every model in its line-up either facelifted or replaced this year. A facelifted Civic will arrive in time for the March plate-change and Honda has reduced prices by up to £1500 to make it more competitive.
There will also be the facelifted CR-V in April, Civic Type-R in July, the HR-V small SUV and new Jazz supermini for the September plate-change, and the NSX sports car towards the end of the year.
This year will be a busy one and the CR-V is a key model with 6827 units sold into fleets last year.
Brannan said: "We're first in the petrol segment with the CR-V, but it's not a big slice of the market.
"Diesel is where we need to be and we want to increase our market share. We had found it tougher than necessary to compete in the corporate market due to not having a competitive diesel. The arrival of the 1.6-litre diesel [in October 2013] has helped us with that and having two power outputs will see us grow in fleet further."
The CR-V is retail-led with 60% going to private buyers. However, Brannan said there is space to grow, and added that Honda's plan for this year was for growth full stop.
While the product is now there, he admitted the brand has been "a bit inconsistent" with how it has gone to market for fleet business.
Honda is holding end-user roadshows throughout the year to showcase its new products and it will be focussing on SME business.
Brannan said: "SME business is what we do, and it's just about the hard graft and getting out there with the product and getting it in front of people."
There's a limit to what Honda can do in terms of larger fleet deals and Brannan said the firm will "not blow its brains out" to compete on price.