Honda's epic price-fixing tantrum

 

Honda Australia is having a price-fixing tantrum in Tullamarine, hitting back at critics. Here’s what it means for consumers like you...

 
 
 

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Honda Australia has a tantrum in Tullamarine, hitting back at price-fixing critics. A full-on corporate sook is the perfect end to lockdowns. Here’s what happened.

Now, if we could harness Honda Australia’s Tullamarine-based tantrum energy and pump it back into the grid, I reckon we’d be carbon-neutral by Christmas. 

Here’s what they’ve had to say about the criticism they’ve received about their apparently brilliant new fix-price so-called business model.

Honda Australia is clearly not happy with people saying what they think about fixed-pricing, in the public domain, and using facts to justify their comments. Bastards. 

Hilariously, this is just the start of an epic press release from Honda Australia, which seems to me like a mayday distress call. 

Trying to be clever, Honda Australia called this press release, ‘The truth about Honda’s new car pricing’. The truth, such a novel concept in corporate communications. Things must be getting desperate to be using the truth card.

The facts are - which Honda does not actually dispute here - of the 18 distinct model grades comprising the Civic, Accord, Odyssey and CR-V vehicles, 16 of those variants went up in price, and only two did not change.

These official price rises were modest, generally, but let’s think about the optics, shall we? This is an audacious way to usher in an allegedly better deal for consumers - to pump up prices across the board, on the very day you unleash the Honda Fixed-Price Promise.

Could you not have waited a couple of months? I would have, had I been CEO of Honda Motor at the time.

See, they axed the ‘base-model’ from the Civic lineup, so the cheapest price to own a Civic actually rose by an incredible $6000 on that day. Well done, that’s the Fixed-Price Promise.

Sales have subsequently imploded, inconveniently, over the following three months - to the lowest levels on record - and this is not solely (or even mostly) attributable to the combined effects of the pandemic, plus them deleting the Jazz and the City altogether on July 1. This is all based on the official industry sales figures.

The sales facts are: 

Overall industry sales rose 21 per cent in September.

The industry was up 21 per cent in September. But Honda was down 50 per cent since the Shit Price Promise began. That sweet smell of commercial success. 

But according to yesterday’s high-level tantrum:

Getting the crew of Apollo 13 back alive was complex. Cutting a few dealers and pumping up prices, I’d suggest, is a menial, clerical, administrative process, underpinned by cortisol and desperation. It’s also a shifty, underhanded, unprincipled way to exploit a loophole in existing price-fixing laws, in Australia, at least in my view. 

Calling it the ‘Honda Price Promise’ is merely taking an emphatically anti-consumer concept and wrapping it in the language of virtue, and hoping the motoring so-called journalists will repeated it and continue to refrain from hard questioning. 

But the elephant in the room here is not the recommended drive-away price, nor the fixed ‘Honda Shit Price Promise’. It’s the difference between the prices consumers actually paid for their Honda six months ago, versus the prices the (admittedly few) Honda customers pay for exactly the same vehicle today.

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CONSUMERS LOSE WHEN THEY CAN’T NEGOTIATE

The transactional price for a new Honda can only go up under this bullshit system because this is economics 101. And please don’t take my word for this:

Unequivocal independent assessment there by John Krafcik. He’s a former big hitter in the US auto industry. Mr Krafcik has been a senior at Ford, Hyundai, Google and Waymo. And he doesn’t appear to have an axe to grind on this issue.

Mr Krafcik made this statement while he was interviewed on the auto industry podcast ‘Autoline After Hours’. He’s highly articulate, experienced and unimpeachably credible.

The bottom line is: Higher prices for you are guaranteed. Plus lower margins for dealers - meaning more incentives for them to fleece you via the other transactions which they still control, such as servicing, parts, repairs, trade-ins, finance, insurance and add-ons. Like, where do I sign?

Also, because dealers are generally multi-franchised (meaning they sell more than one brand) their resources will be allocated to the brands earning them the most profit - meaning away from Honda. I’m talking support, parts inventory, technical training, etc. All worse propositions for you, in future, if you buy a Honda today.

Carmakers have these tantrums all the time in the boardroom. Rarely, however, are they sufficiently extreme enough to make it into the domain of a public denial and bullshit-based repudiation. So, this one must have been quite the enthusiastic dummy spit.

I’d suggest, if Honda Australia was so on the right track, it probably would not need to object to recent commentary quite so hard. If it’s working and everything is good, why do you need to shout about it?

And don’t get even the slightest impression this is some kind of movement within the industry. Besides Honda, only Mercedes-Benz Australia is trying the fixed-price model and they’ve hit a very large roadblock on that >>

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