Honda is set to cut several local dealerships in Australia in June, before introducing new laws on car dealerships and services in Australia.
The company appears to be looking to move away from its traditional car dealership model, and the decision follows sweeping changes to Honda’s entire product line — including removing Jazz, City and NSX models from its product lineup.
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 about 12 outlets are planned to close – but the rest will shift towards an agency model known as “hub and talk”. This means that there will be some “pivot” agents designed to serve customer needs, and other channels that include mall fronts and separate service centers.
While we don’t currently have a clear view of what the “hub” and “speaker” location will look like, we know it will have an enormous impact on local Australian dealerships.
“Our network restructuring will include new and different retail and service centers across Australia, with between 90-95 Honda centers making up our new national network,” a Honda spokesperson in Australia told Gizmodo Australia by email.
According to Honda, it has undertaken a “thorough, objective, and considered process to identify dealers that will be part of the new dealership model.”
Suttons City Honda of New South Wales is one of the first retailers to announce the closure and recently sent the following email to consumers, thanking them for their time with the company.
In an email seen by Gizmodo Australia, Honda said it was making changes to its business operations and dealer network.
It’s clearly just the first step in a long makeover process for Honda, which is said to be looking to focus on quality over quantity in the future.
“This is a completely different business model and we’re coming from a base of about 40,000 units to 20,000 units and we’re currently in that slide down, but we think in terms of where our brand is, we want to be Honda Australia general manager Stephen Cullen told Cars Guide. Last March, this is a slightly more sustainable model, and we believe that for all parties involved – our customers, our partners and us – this is a sustainable model for the future.
Collins continued to detail the current changes taking place in the automotive landscape and described Honda’s transformation as an important one for the company’s sustainability.
The timing of these closures coincides with changes to the law
The decision to cut dealerships and production lines also coincides with sweeping changes to Australia’s laws around car dealerships and service.
As part of these new franchise laws, agents will only be able to close under “special circumstances” with huge fines awaiting companies that break merchant contracts. Plans for these new laws were initially made after the sudden shutdown of Holden in 2020, and will take effect from July 1 to better protect consumers.
Honda did not cite this as a reason for the changes although these laws came into effect just a day after some dealerships closed.
It is clear that customers will not be left in trouble
Back in March Collins assured car buyers that the company remained 100 per cent committed to the Australian market, despite the sweeping changes.
“Our goal is for Honda customers to be able to continue with their vehicles service and full warranty repairs, while enjoying a similar level of comfort to what they enjoy today,” a Honda spokesperson in Australia told Gizmodo Australia.
Honda also stated that its new model will provide assured pricing to consumers and “a consistent and exceptional experience, no matter which Honda center they visit.”
If you’re a current Honda owner, service and support won’t go away—but you should still check with your local dealer and see if it’s one of the many franchises that will be closing over the next few months.