Honda predicts four-fold growth for Civic

HONDA has forecast an almost four-fold increase in sales of the ninth-generation Civic range in 2013 – its first full year on sale in Australia – to 24,000 units, thanks to the cheaper new Civic hatch and the arrival of Thai-made versions of the recently released sedan.

This would achieve a record for the Civic in 40 years on sale in Australia, topping the 17,643 sales posted in 2007.

Last year, Civic sales dropped to just 6499 – down 37.9 on the previous year’s 10,457 units – as Japanese tsunami-related supply issues impacted its run-out year.

Honda Australia director and general manager of sales and marketing, Stephen Collins said he was counting on the new Civic boosting the company’s total sales this year by 25 per cent to 40,000 units.

“Our intention now is very much focussed on the future,” he said.

“We want to sell 2000 Civics per month. The expectation will be about 50/50 (sedan/hatch).

“We’re selling around 1000 sedans now (since it was launched in February) and we expect to sell around 1000 hatches.

“We think there won’t be a lot of cannibalisation between the two. The (base model) VTi-S hatch is specified well and so will hit its target.”

Left: Honda Civic hatch.

On current figures, Civic will not challenge the top three small cars – the Mazda 3, Toyota Corolla and Holden Cruze, which enjoyed segment shares of 15.8, 15.2 and 13.7 per cent respectively for the first five months of this year.

However, Honda’s projections will put it within striking distance of the Hyundai i30 (10.4 per cent) with about 10 per cent segment market share.

Mr Collins said the sedan is already flying out dealer doors faster than anticipated with its new, lower starting price of $20,990, finding 1147 buyers in May alone.

Even before this month’s launch of the long-awaited affordable hatchback, that helped push Civic sales up 12.1 per cent over the same period last year – double the small-car growth rate over the same period.

At almost $7500 cheaper than its predecessor, the $22,650 VTi-S hatch is the most competitively priced Civic five-door since the demise of the $24,950 Vi in January 2006.

In the face of a 50 per cent drop in sales between 2007 and 2011, Mr Collins said Honda has had to work harder and smarter in order to offer the right sort of vehicles at the right price in Australia.

“Our product strategy has changed a bit,” he said.

“No matter where a car is produced in the world, we should be bringing cars to this market that suit the market, and I think the Civic hatch is an example of that.

“We’ve really recognised that we are rebuilding. We’re rebuilding now, and it will take another year or two to rebuild where we once were, and a huge part of that is product.

“I personally think our dealer network is right, our pricing is right on the money, but at the end of the day there is nothing like good product, and that’s why we are really keen to get the Civic hatch on the market really quickly.

“It’s in the single biggest segment in the market. Mazda 3 is obviously still a very, very strong vehicle in the market, the Golf is very aggressive, the Cruze is doing very well, so there are damn good cars out there, but we think this stacks up in every measure.”

Mr Collins admits that external factors have played a part in the latest British-built Civic hatchback’s favourable pricing.

“One of the things that is clearly working for us is the exchange rate. Obviously, sourcing from Europe, the Aussie dollar has been pretty strong, and that has certainly assisted us.

“Another factor is that we’ve negotiated hard, and we’ve really worked hard to position this car in the mid part of the small hatch segment. And with that comes a volume expectation, and all that leads to a business case, and the business case stacks up.

“Ultimately, it has been those two factors that have enabled us to position that car really aggressively.

“I saw the car as a clay model 18 months ago and just thought, ‘This is a great-looking car’, and thought it would very much appeal to our buyers.

“We showed the car to our dealer network conference in March and got very strong support, so we will market it aggressively to deliver the volume.

“As we move forward to the third quarter of this year, we have many reasons to be confident.

“We are on track to achieve 40,000 units this year. And by the end of this year, we will be selling in excess of 4000 units per month.

“So, as you can see, Honda is back.”