Honda in Australia

1. Table of Contents
Characteristics of Automobile Industry ................................................................................................1
Operations of Honda in Australia.........................................................................................................2
Reputation.........................................................................................................................................7
Customer Feedback& Complaints........................................................................................................8
Problems faced by service providers....................................................................................................8
Challenges..........................................................................................................................................8
Recommsendation:.............................................................................................................................9
Future Growth of Honda...................................................................................................................10
Bibliography.....................................................................................................................................10
Characteristics ofAutomobile Industry
The automobile industry has a employees around 400,000 working and more than 1,000,000
vehicles & 100,000 motorbikes were sold in Australia last year.
 The industry has workforce around 400,000 employees working directly and indirectly.
 The yearly turnover of the industry increased to $160 billion and is one of the biggest
incomes for the government in the form of tax.
 Motorcycle industry earned approximately $3.6 billion in revenue in Australia in 2010.
Passenger cars sale will increase to 73.9 million vehicles globally by 2015. Australia is one of
the largest automobile markets after China in terms of sales and production both. In 2014, 7.7
million cars & 4.25 million cars were sold and produced respectively.

2. In the last 18 months, Australian automobile industry has not performed in the way it has
performed in the last few decades. Slowly the auto production is decreasing and imports have
also come down along with the exports of auto products. Ford already had planned to exit the
operations in Australia by the end of 2016. General Motors is also moving on the same track as
Ford Motors. Even they will exit Australia by 2017. So the companies which are planning to
enter the automobile industry have to be little bit careful if they have expansion plans.
Australian auto industry is not as attractive as it was few years back. The tax imposed by the
Australian government as luxury tax makes it less profitable. The global automobile industry is
growing but Australian industry is declining year by year,
This report will cover the one of the biggest automobile company Honda. Honda Australia Pty
Limited is a foreign-owned private firm that earns its income from importing and selling motor
vehicles, motorcycles, power equipment, marine products and similar parts and accessories. The
firm employs approximately 310 staff across its operations in Australia and is controlled from its
main office in Tullamarine, Victoria. The company is a wholly-owned subsidiary of the
Japanese-based Honda Motor Company Limited.
Operations of Hondain Australia
Honda Australia Pty Limited provides motor vehicles, motorcycles, marine products and power
equipment products, as well as accessories &parts in Australia.
The company provides products in the following sections:
 Motor Vehicles - Models that the company provides include the: Jazz, City, Civic Hatch, New
Civic, Accord, HR-V, CR-V, Odyssey, and NSX.
 Motorcycles - offers the following range: Road, Off Road, Scooter, ATV (All Terrain Vehicles),
Side by Side, Learner approved motorcycles and Oils & Chemicals.

3.  Marine Products - provides a range of products including: Portable, Mid-Range, High
Horsepower, Technology, Accessories, and Oils & Chemicals.
 Power Equipment - in this category the company offers: Lawn Mowers, Hedge Cutters, Blowers,
, Engines, Generators, Pumps, Power Carriers, Tillers, Powered by Honda and Oils &
Chemicals.
According to IBIS World Company Profile records, Company profile provides important
information on the top 2000 profit making companies in Australia. This include a written
description of a company, its history, brands and products, contact details and main important
personnel, operating and legal structure, financial data, industries of involvement and business
service providers.
It is has been estimated that Honda is selling about 1 million goods every day in Australia which
includes bikes, engines, vehicles, heavy equipment.
Goods are imported from the USA, Japan, Thailand, Italy, Belgium and China. Honda actually
exports goods to New Zealand, South Africa, South Pacific, Egypt, Saudi Arabia and Spain.
Goods are evensold nationally around Australia.
Honda MPE Head Office: Honda MPE is located at 1954-1956, Sydney Road in Campbell field,
Victoria.

4. The area is 1.295 hectares including of 5,588 square meters of building. Along with the head
office, the parts warehouse and workshop are also located in Australia(The Honda HR-V, n.d.).
Honda Manufacturing Australia (HMA) is also located in Campbell field, Victoria with anarea of
4,309 square meters. Manufacturing started at this site on the 17th February 1988.
Honda lawnmowers are manufactured at this site using components from Australian suppliers
with some parts being imported from Japan, New Zealand, USA and China. The 19” and 21”
lawnmower engines are sourced from Honda America and Jialing Honda China.Honda
lawnmowers are distributed nationally to domestic and international customers via the supplier
network which comprises of over 400 dealerships. In increasing to Australian sales, the good is
also exported to 19 countries.Current production output is 40,000 units per year with capacity to
produce up to 50,000 units per year. HMA began manufacturing of the new brush cutter range in
August 2005 with a manufacturing in addition of 24,000 units per year.
Honda Australia Rider Training is one of the motorcycle training academie sconsisting of four
facilities. Two facilities are situated in Melbourne, the eastern suburb of Kilsyth and the northern
suburb of Somerton. The third site is located in St Ives, New South Wales. HART St Ives was
officially opened by Barry O'Farrell (Member for Ku Ring Gai) and Mr Tsutomu Umeno
(General Manager East Asia and Oceania, Honda Motor Co. Ltd) on 18 November 1999.The
fourth site is located in Brisbane, Queensland. Somerton was started in 2009; Kilsyth in 1994, St
Ives and Brisbane began operation in 2008.
Presently 18,000 students are trained annually across all three sites. In addition to motorcycle
training, St Ives also offers motor vehicle training .HART is the selected training provider for
Australia Post-deliverystaff.
Honda adds to market the world’s most available range of motorcycle, power equipment and
marine products. The Honda brand included with assurances of excellent quality, technology,
and performance. Great customer service is also additional, and a top class Customer
Relationship Management a must(Annual report, 2015).
As is the case with many successful multi-tier sales operations, there came a point where Honda
Australia Motorcycle & Power Equipment recognized that while it was diligently nurturing

5. individual relationships – with partners, dealers and customers – each was closed off from the
others. Inevitably, this meant valuable customer data being trapped in pockets within the
organization. Freeing up the flow of data would undoubtedly have a huge positive impact of
efficiency throughout the business.
Outlining a strategy for creating Customers For Life through achieving a 360° customer view,
Honda engaged Sqware Peg to take its data into the cloud using salesforce.com. The project,
completed in phases, saw the transition of customer data from numerous spreadsheets and
databases onto a single Sales force platform. Customer information from Honda Australia Rider
Training (HART), Automobile Association memberships, and several other sources were
harmonized into a single comprehensive data source and reporting system.
Honda also established a dedicated CRM unit, equipped with a complete view of customer data
and powerful marketing tool Eloqua, removing the responsibility for managing customer
relationships from the individual departments and giving them back valuable time and resources
for focusing on core activities. Now, for the first time, instead of hitting customers several times
from different directions, Honda is able to consolidate outbound customer contact into
meaningful and relevant communications – and accurately measure its effectiveness.
Integrating service with Sales force has allowed Honda to build workflows into customer touch
points, for example customer satisfaction surveys, guaranteeing follow up of any negative
comments. The immediate effect has been a reduction in complaint resolution time from months
to minutes.
Now operating as a unified brand, Honda is marketing smart, drawing on customer analytics to
tailor EDMs to target audiences. During the four years since going live with Honda has grown its
customer email database from 10,000 to 100,000 - that’s a ten-fold increase in EDM targets, or
ten times the opportunities for cross selling and up selling.
Honda Australia has announced that the Honda Riders Club of Australia (HRCA) will undergo
changes to its management structure and operations in the coming months, ultimately resulting in
the Club being run in-house at the manufacturer’s headquarters in Melbourne. HRCA was
established approximately 15 years ago by long-time Honda corporate partners Rob and Val

6. Watson who worked tirelessly to build the Club to include 150,000 cumulative members, and
nearly 50,000 current members. In light of the Watsons announcing their retirement effective
from the end of 2008, Honda Australia will assume all operations under the leadership of Rhys
Griffiths.
Rhys has been with Honda Australia for 14 years, firstly as Manager of Honda Australia Rider
Training (HART), followed by the role of Motorcycle Marketing Services Manager. Tony
Hinton, Motorcycles General Manager said the Watsons have been “truly wonderful”
ambassadors for Honda over many years. Honda Australia has announced that the Honda Riders
Club of Australia (HRCA) will undergo changes to its management structure and operations in
the coming months, ultimately resulting in the Club being run in-house at the manufacturer’s
headquarters in Melbourne.
HRCA was established approximately 15 years ago by long-time Honda corporate partners Rob
and Val Watson who worked tirelessly to build the Club to include 150,000 cumulative
members, and nearly 50,000 current members.In light of the Watsons announcing their
retirement effective from the end of 2008, Honda Australia will assume all operations under the
leadership of Rhys Griffiths.
Rhys has been with Honda Australia for 14 years, firstly as Manager of Honda Australia Rider
Training (HART), followed by the role of Motorcycle Marketing Services Manager. Tony
Hinton, Motorcycles General Manager said the Watsons have been “truly wonderful”
ambassadors for Honda over many years.Honda Australia MPE started operations in 1991 and
has its headquarters in Melbourne, Victoria, part of the global Honda Company that is the
world’s largest engine manufacturer; Honda Australia MPE manufactures and distributes
motorcycles, marine power equipment and personal watercraft. Sales for Honda MPE in the
2007 financial year exceeded $350 million, representing approximately 210,000 products.
There have been reasons for the decreasing market share for the Australian companies. Just 20 %
vehicles are manufactured locally, rest all are produced globally where the production cost is
less. Honda Motors is not able to manufacture environmentally friendly cars and therefore
market share has declined.

7. Reputation
Currently, Honda sales are down 33.6 per cent year to date, according to VFACTS data for April,
dropping from 14,743 units in 2013 to 9789 this year.
Speaking at the local launch of the Honda City light sedan, Honda Australia Director Stephen
Collins highlighted the diversity of the Australian auto industry and the need for Honda to
respond to it.
With more brands generally and the cessation of local manufacturing and the run-outs that will
come as a result, we’ve had to refocus on the cores of the brand. That means product, customer
and the dealer network. Trends indicate there are more cars per household and there is more
disposable income to spend. Additionally, our customers are demanding more digital media
functionality. We aim to provide that connectivity safely, through our Display Audio system,
with the aim of attracting younger buyers, he explained. In terms of product, the short-term
Honda focus is on sub-Civic offerings. This includes the new City, which is expected to sell
around 250 units per month, along with the upcoming Jazz, which will be launched locally in
July this year.
Honda anticipates Jazz to sell 1000 units per month as City and Jazz are both being sourced from
Thailand with no supply issues, both light segment models are expected to contribute to a Honda
sales boost, from an average of 2666 to a projected figure of 3067 per month in the second half
of 2014.Additionally, Honda’s all-new small SUV, to wear the HR-V badge, will come on-
stream in January 2015.HR-V will be Honda’s core model, after the Jazz. Honda will roll out the
petrol initially, to be followed by a diesel offering at a later date.
Honda Australia expects to sell a total of 38,000 units in calendar year 2014, a figure revised
down from the anticipated 40,000 units predicted at the start of the year. Toyota and Honda tied
with the highest score of 809 points, while last year’s winner Subaru ranked third on 805 points.
Mazda, at 801, finished above this year’s 791 overall customer satisfaction average – a two-point
decrease on 2011, which JD Power suggests is the result of declines in the scores for quality
(down five points), service advisor (down eight points) and service facility (down six points).

8. Mitsubishi equaled the industry average while Kia (784), Hyundai (783), Holden (779), Ford
(775), Nissan (767), and Suzuki (764) all fell below the line. Volkswagen was the worst
performer with a score of 757(Montagnon and Richards, 2008).
Customer Feedback& Complaints
Honda ranks highest in customer satisfaction with dealer service among mass market brands,
with a score of 816. Mazda ranks second (813), followed by Toyota (807), Kia (804) and Subaru
(800).
The 2015 Australia Customer Service Index (CSI) Study is based on responses from 4,518
owners who purchased their new vehicle between August 2010 and October 2015 and took their
vehicle for service at an authorized service center between August 2014 and October 2015.
Problems faced by service providers:
The main issues are:
 Unavailability of skilled man power
 Most of the workshop having semiskilled or unskilled man power in major contribution
 Skilled man power is being utilized in instructions, supervision only
 Skilled man power don't do service by them self
 One point solutions are very limited. Who have all facilities under one roof are expensive
and many time out of pocket as well.
Challenges:
 There should be various training centers throughout the country
 This training center should provide on job training
 Trained man power should get certificate about the particular job in which he is skilled
like skilled in painting or wheel alignment or engine service etc.
 Each service center should mandatory to keep at least one skilled man power of each job
 Need to create a network by connecting all service centers.

9. The component sector of the automotive manufacturing industry has been, and will continue to
be, most affected by the wind-down in vehicle production. In recent years, Australia's
automotive component manufacturers have faced significant challenges due to relatively high
production costs, increased global competition and (until recently) a relatively high exchange
rate. Global car manufacturing trends, which seek to integrate component suppliers through
rationalization and co-location, have added to these challenges. The cessation of automotive
vehicle production in Australia will place the local component manufacturing industry under
extreme pressure, potentially leading to the closure of many local component manufacturers.
Given the advance notice provided by the vehicle producers, it is likely that most, if not all,
component manufacturers will have explored their options and determined whether they are able
to continue to operate following the cessation of domestic vehicle production. Many local
subsidiaries of global car manufacturers and component suppliers were explicitly set up to
service local automotive production and are likely no longer to have operations in Australia after
2017. That is not to say that all local subsidiaries will cease manufacturing in Australia. For
example, even though Nissan has not been manufacturing vehicles in Australia for a number of
years, its Australian operations continue to provide components for 39 models of vehicles which
are assembled around the world(Challenges for the automotive industry in an on demand
environment, n.d.).
Recommendations:
 More focus of the automobile companies should be on the core business.
 Price penetration policy is best suited for the industry as many related industries follow
the same.
 Before diversification in any other industry, Honda has to do due diligence as the auto
industry is going through a maturation phase.
 As GM Motors and Ford Motors will not be there in the competition after 2018, this will
be the right time for Honda to diversify and increase their operations.

10. Future Growth of Honda:
Honda should focus on electric auto market which is pollution free and will be right
diversification for the company.
It has been estimated that every six car globally will be Honda by the experts by the year 2050.
Honda will soon leave Toyota and GM by sales volume by 2025. The Australian automobile
component industry will generate 190$ billion. The industry analysts have estimated that Honda
will be the leading automobile company in the world with the growth of 9.5% annually. The
Australian automobile company will be the most attractive industry by the year end 2050. The
Australian government is also working towards the welfare of the automobile industry. The
government is planning to remove the luxury tax on the cars which will help Honda to make
more profits and hence will help to grow.
Honda has to plan for the diversification in order to leave the competitors behind otherwise it can
become the bottleneck for Honda Motors.
Bibliography
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[Accessed 10 Oct. 2016].
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2016].
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