√Honda Australia boss to step down after introducing fixed-price business model

The boss of Honda Australia has announced his resignation later this year after introducing non-negotiable fixed prices in July 2021.

One of the architects of Honda Australia’s controversial switch to a non-negotiable fixed-price business model in July 2021 has announced he will resign from his senior position within the company.

In a statement issued late on Friday afternoon, the company said Honda Australia Director and Chief Operating Officer, Stephen Collins “has today announced his resignation, which will become effective from November 4, 2022”.

Mr Collins held the top job at Honda Australia for a decade but his tenure will be best known for the switch to a non-negotiable fixed-price business model, which streamlined the number of dealers and aimed to deliver more profit from selling fewer cars.

German luxury brand Mercedes-Benz made a similar move to fixed prices in January this year and there is now in a protracted legal battle in the Federal Court between its dealers and the car giant.

Honda sales so far this year are down by 17.8 per cent in a market that is down by 0.6 per cent, as it grapples with stock shortages.

However, not every dealer has been satisfied with Honda’s new arrangements – in which showroom owners are paid a set fee to sell and deliver each new car.

Drive is aware of a number of dealers across Queensland, NSW and Victoria who have handed back – or who have requested to hand back – their Honda franchise.

Honda dealers who no longer want to represent the brand are required to give a period of notice, and are bound by confidentiality agreements that prohibit them from discussing their individual circumstances.

A number of key industry figures now believe Honda is planning a slow retreat from Australia because it is unprofitable to sell cars here – or because Honda cannot achieve the profit targets it hopes to achieve in this market.

However, Honda Australia has repeatedly said it is committed to Australia in the long term, and the new business model is evidence it is here to stay.

The company has recently introduced new models including the latest generation of the Honda Civic sedan and Honda HR-V family SUV.

However, both came with significant price rises – beyond the increases posted by other automotive brands for their new models.

The Honda Civic sedan costs from $47,200 drive-away (the previous range started from as low as $24,990 drive-away), while the new Honda HR-V starts from $36,700 drive-away (the previous range started from as low as $27,490 drive-away).

In a media statement, Honda Australia Managing Director and CEO Yoshitaka Okamoto said Mr Collins’ “leadership, strategic thinking and strong relationships across the network, industry and government, have been critical in establishing a strong base for the future of Honda.”

Ms Carolyn McMahon, currently on the Board of Honda Australia and an existing Director within the business – who has been with the company for 27 years – will now also oversee the automotive division.

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