Honda is set to cut several local dealerships in Australia this June, right before new laws regarding car dealerships and services are introduced in Australia.
The company seems to be looking to move away from the traditional car retail model and the decision follows sweeping changes to the entire Honda line — including the removal of the Jazz, City and NSX models from its product line-up.
This article was originally published on June 4, 2021. It has since been updated to include comment from Honda Australia.
Honda decides to close some dealerships
Currently, only around 12 outlets are planned to close — but the rest will shift towards an agency model known as ‘hub and spoke’. This means there’ll be some ‘hub’ dealerships designed to service customer needs, and other ‘spoke’ channels including shopping centre fronts and seperate service centres.
While we don’t currently have a clear view of what these ‘hub’ and ‘spoke’ locations will look like, we do know it’ll have a massive impact on local Australian dealerships.
“The restructure of our network will include new and different retail and service centres around Australia, with between 90-95 Honda Centres forming our new national network,” a Honda Australia spokesperson told Gizmodo Australia via email.
According to Honda, it undertook a “thorough, objective and considered process to determine which dealers would form part of the new agency model.”
Suttons City Honda in New South Wales is one of the first retailers to announce closure and it recently sent out the following email to consumers, thanking them for their time with the company.
In an email seen by Gizmodo Australia, Honda said it is making changes to its business operations and dealer network.
Apparently it’s just the first step in a long change process for Honda, which is reportedly looking to focus on quality over quantity in the future.
“This is a very different business model and we’re coming from a base of around 40,000 units to 20,000 units and we’re currently on this glide down, but we believe that in terms of where our brand is, we want to be a bit more premium and we believe for all parties involved – customers, our partners and us – this is a sustainable model for the future,” Stephen Collin, GM of Honda Australia, told Cars Guide back in March.
Collins went on to detail the current changes taking place in the automative landscape and described Honda’s shift as an important one for the sustainability of the company.
The timing of these closures coincides with law changes
The decision to cut dealerships and product lines also happens to coincide with sweeping changes to Australia’s laws around car dealerships and service.
As part of these new franchise laws, dealerships will only be able to close under ‘special circumstances’ with massive fines awaiting companies that break dealer contracts. Plans for these new laws were initially drawn up following the sudden closure of Holden in 2020, and will be put into effect from July 1 to better protect consumers.
This was not cited by Honda as a reason for its changes despite these laws coming into effect just one day day after some dealerships are set to close.
Customers apparently won’t be left in the lurch
Back in March Collins assured car buyers that the company remained 100 per cent committed to the Australian market, despite the sweeping changes.
“Our aim is for Honda customers to be able to continue to service their vehicles and complete warranty repairs, while experiencing a similar level of convenience to what they enjoy today,” a Honda Australia spokesperson told Gizmodo Australia.
Honda also stated its new model would would offer certainty of price to consumers and “consistent, exceptional experience, no matter which Honda Centre they visit”.
If you’re a current Honda owner, service and support won’t be going away — but you should still check in with your local dealer and find out whether it’s one of the many franchises set to close over the next few months.