Honda’s stated aim to move upmarket and challenge premium manufacturers is expected to result in significant changes to the brand’s UK dealer network, with the number of individual dealership owners cut by a third.
Go deeper with GlobalData
Speaking to just-auto at the international launch of the new Accord, Honda UK’s head of marketing Tom Gardner said that the brand’s growing sales performance was forcing its dealers to grow too, and an ongoing move to a larger market area structure would enable those wanting to improve their facilities to have a more stable investment programme.
“Nationally we have 196 dealers, which over the next couple of years will likely grow to over 200, but we also have something like 105 owners, and we see that shrinking down to probably 65, 67 owners,” Gardner said.
While he admitted that this process was ongoing, with, 20 years ago, Honda having had some 200 dealership owners, Gardner indicated that a focus on customer care imperative to capture corporate and premium customers was accelerating the process.
“Customer care is easier when the dealer has more investment, more of a stake in the brand. Having four or five sites in common ownership enables a more consistent local experience, allows central administration to be moved away from the dealership, which creates better customer facilities, and it reduces dealer operating costs. It’s a compelling argument and a number of our competitors have already gone down that route.”
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataThe new Accord is expected to capture a significant slice of the corporate market and effectively compete with Audi’s A4 and the BMW 3 series, and Gardner said he was confident his dealers could match the customer care standards expected of such brands.
“We have been second to Lexus for a couple of years in the JD Power customer satisfaction survey – and with an ambition to be number one. In such surveys our dealers perform very strongly across the board but particularly in service, and that is the key to where we can differentiate ourselves from other brands – the way we look after customers through the purchase process but also afterwards when customers are looking for after sales.”
Gardner admitted that sales success posed a challenge for dealer facilities in the UK.
“Moving a brand that a few years ago was doing 70,000 units a year to doing more than 100,000, means you will need more service points, more parking, and you will do more trade-ins so you will need more used car sites.”
He added, however, that Honda was not demanding investment from its dealers.
“We want to work in partnership with dealers, help them build good business cases – not to be heavy-handed. It’s about working with partners – some of these will be new, as there is a lot of interest in the franchise, driven greatly by the new technologies we are working with such as hybrids, the environmental investments we are making.”
Gardner also revealed that Honda has been attempting to compare its customer performance to brands outside the industry.
“JD Power is an automotive survey, you are benchmarking against other auto people, but how does our customer experience match up to that with someone like Apple, or John Lewis? Our customers live in the real world, the auto brand they work with is only one of 50 or 60 they interact with, so we want to know where we are in that real world.”
The Accord saloon launches on 1 June and Gardner is confident it can pose a serious challenge to Audi and BMW while continuing to decrease the previously highly mature age profile of the Honda customer – the latest Civic having already reduced that profile by some 11 years.
The desire to target corporate and premium customers has seen an early boost with the Accord earning strong residual value predictions of 43%.
“It’s raising the whole game for us,” Gardner said, adding: “In the past the car on-sale date has been the order start date for us but with Accord our order book opened on 1 April. In the first 10 days we got 80-plus orders which considering the only information at the time was very generic was very pleasing. There has been pent-up demand since the Tourer was unveiled, but there’s still room to grow.”
Andrew Charman
