The truth about Honda's new car pricing

Recent commentary on changes to the way Honda operates in Australia has seen some reports published claiming vehicle prices would rise significantly as a result of the introduction of an ‘agency-style’ business model, or indeed have already risen significantly as a result.

But that is simply not true.

Across the 18 individual grades that make up the current Honda vehicle range, the largest straight price increase that occurred on July 1 this year, for any one grade, was $300. There was no change to the price of two grades, while the rest of the range was somewhere in between.

But these price changes are unrelated to the introduction of the new business model.

Like many other consumer goods and industries, changes to the price of new vehicles are a regular occurrence and can be the result of a wide variety of factors.

These factors can include currency exchange rate fluctuations, model lifecycle timings, introduction of new models or grades, specification or equipment changes, production capacity constraints, raw material availability and cost, supply and demand pressures, cost of individual components and parts, and customer preferences, not to mention the underlying fundamentals of running a sustainable business in a highly competitive environment.

Sometimes prices can change from one month to the next, sometimes they remain steady for longer periods.

This is the full list of price changes that occurred on July 1, 2021, for the 18 individual Honda grades covering the complete Civic, Accord, Odyssey, HR-V and CR-V line-ups:

Price change No. of Grades receiving change
No change 2
+$100 1
+$200 8
+$300 7

To put the price changes another way – using the $200 increase that occurred on the popular HR-V RS as the example, that is equivalent to around 2.5 tanks of fuel* … or around ¼ of the annual vehicle registration cost in metropolitan Melbourne^ … or just over 0.5 per cent of the drive away purchase price~.

Whichever way you choose to measure it, claiming these changes are indicative of large price increases under the agency business model, is just not accurate.

So why are some people saying that prices have risen significantly with the launch of Honda’s new business model on July 1?

It’s a good question and one you should really ask them to explain, as the facts do not support the assertion.