Honda dealers say the brand is preparing to leave Australia

It’s been a favourite with new-car buyers for decades but disgruntled dealers say the marque is headed the same way as Holden.

The popular Honda Jazz will be phased out as part of a brand restructure. Picture: Supplied.

Shell-shocked Honda dealers claim the company’s decision to restructure its network is the beginning of the end for the brand locally.

The company terminated a number of long-serving dealers this week to prepare for a new distribution model that effectively cuts dealers out of the sales process.

It plans to dump the popular Jazz from its line-up and, by July next year, expects to sell less than half the cars it sold last year.

Honda says it won’t replace its popular Jazz hatchback.

One senior dealer, who preferred to remain anonymous, said this week’s move was the start of a terminal decline for the brand.

“There is no doubt this is the beginning of the end. They are following Holden out of the country,” he said.

RELATED: Honda Australia’s ‘devastating’ changes

RELATED: Death of Holden: Which car brand is next?

He said rival brands would make a killing from Honda’s reduced footprint in some cities.

“This is a godsend for the likes of Subaru and Mazda,” he said.

Honda spokeswoman Naomi Rebeschini denied the restructure was the first step of a staged withdrawal from the country.

“We are committed to the Australian market. This is about strengthening the business for the future,” she said.

The Honda City will also be withdrawn from sale locally. Picture: Joshua Dowling.

The cuts to the dealer network are believed to be drastic, with one insider claiming nine of the 12 Honda dealers in Sydney have been terminated.

Industry publication Go Auto claimed the number of Honda dealerships would drop from 105 to 60 and their owners from 71 to 12.

Honda disputed the rumours, saying it intended to maintain “a similar number of sites”, but would not reveal how many dealers it had terminated nor how many it planned to have by July 2021.

Senior executives declined to talk to the media after the announcement. The company instead releasing the following statement:

“By mid-2021, the number of sites is not expected to materially change, but the number of owners will be reduced. We are still in consultation with our network so cannot confirm the final number of owners yet.

The brand will focus on SUVs. Picture: Thomas Wielecki

“Most changes will occur in metro regions where will shift to a ‘hub and spoke model’. This will allow us to design a Honda network that is suitable to the size of our business yet still allow us to service our existing customers in a convenient manner.

“This may see the creation of different types of retail representation, including satellite service centres.”

But dealers said the model was doomed to fail. “This is not even a short-term solution,” one said.

Customers would abandon the brand if they were forced to travel long distances to have their car serviced. “No one wants to travel an hour to have their car serviced,” he said.

The chief executive of the Australian Automotive Dealer Association, James Voortman, said the move was “a kick in the guts” for dealers.

“Honda should come clean and specify how many dealers they will be terminating,” he said.

He said he was stunned by the timing of the announcement. “It simply lacks compassion,” he said.

He called on the brand to compensate dealers for the “significant investments they have made in the brand, be it capital, time or effort”.

Honda declined to comment on whether affected dealers would be compensated.