Honda Malaysia has revealed its business direction for 2024, expressing optimism and determination to achieve its goals despite challenges in the automotive industry. The company sets its sights on reaching a sales target of 95,000 units and capturing a market share of 12.8% for the year.
Building upon the accomplishments of 2023, which included retaining the No.1 position in the Non-National Passenger Vehicle Segment for the tenth consecutive year and meeting the sales target of 80,000 units, Honda Malaysia remains committed to driving success.
Back in July the WR-V received 2,500 orders and in August, Honda Malaysia delivered 2,200 of them. The WR-V quickly became Honda’s second best-selling model for July 2023.
The Honda WR-V is gaining popularity in Malaysia despite a slightly higher starting price compared to the City variants. While Honda aimed for 1,400 monthly sales, they’ve already delivered over 3,300 units of the WR-V within two months of launch, with total orders reaching 7,300 units. The RS trim is the most popular choice among customers.
In a recent update, Honda Malaysia has reported delivering 2,200 units of the all-new WR-V in just a single month following its official launch in July 2023.
The corporation additionally marked the first customer who placed a reservation for Honda’s compact SUV in Malaysia. This was observed through an official handover event held in early August at Accord Auto Sdn. Bhd. As a token of gratitude to mark this significant occurrence, the customer was granted Honda accessories, ultra glass body coating, and official merchandise, with a combined value of RM5,000.
Like other car companies, Honda Malaysia is looking at how to best regain its business momentum in the remaining four months of 2021 after the prolonged shutdown of both retail activities as well as production at the assembly plant in Melaka. Whatever target was set at the beginning of the year would be hard to achieve, especially with over 2 months of almost no sales. Until the end of July, the total number of new vehicles sold was 25,581 units.
To sell as many vehicles as possible before the year ends, the company has plans to launch new models and offer financial initiatives with promotional campaigns. While the new models are not mentioned, it is likely that apart from updates of existing models, there could be the new City Hatchback and 11th generation Civic, both of which have appeared in neighbouring countries.
“In our plans to regain the momentum and set a new benchmark in the market, Honda Malaysia has lined up new models that feature Honda’s Next Generation Advanced Technology to be launched in the coming months. These launches will provide Malaysians with more new model options during the current sales tax exemption period, which has been extended to December 31, 2021,” said Honda Malaysia’s Managing Director & CEO, Madoka Chujo.
With the resumption of assembly operations, the company is also rushing out new vehicles to clear backlogs as well as to prepare for new demand. While speeding up output, the company is mindful of the need to maintain quality at the expected high standards. At the same time, with the ongoing pandemic, extra vigilance and precautionary measures have been implemented in addition to the continued SOPs (Standard Operating Procedures) and government guidelines to ensure a safe environment for Honda associates.
Honda Malaysia’s assembly plant in Melaka.
Full vaccination of workforce by October
Ms. Chujo said that 80% of Honda associates have been fully vaccinated. “This is part of our effort to help curb the spread of COVID-19. This effort was also accelerated by the Public-Private Partnership COVID-19 Industry Immunisation Programme (PIKAS). As the nation is making great progress with the vaccination programme, we target to complete full vaccination of all our associates by October 2021,” she added.
The same stringent adherence to SOPs also applies at dealerships for the protection of customers and employees. All precautionary and preventive measures are taken which include COVID-19 tests for associates every 2 weeks, regular sanitisation and disinfection of the premises. “We are most appreciative of the government’s support in reopening the automotive sector that allows the business chain to operate under strict observance of SOPs,” Ms. Chujo said.
Promotions in September
In addition to reduced prices with the sales tax exemption, Honda Malaysia’s ‘September Special Benefits’ promotion for the month offers up to RM6,000 worth of benefits for customers. A Special Financing Program that will be available until December 31, 2021 allows customers who purchase new vehicles to pay lower monthly instalments during the early stage of their ownership. Honda dealers have more details on this program.
Customers who have already made up their mind which Honda model they want to buy can make use of the Online Pre-Booking Platform. Available on the Honda Malaysia Official Website and HondaTouch application, this platform enables customers to pre-book any Honda model at anytime from anywhere (as long as they have an internet connection) with a minimum fee of just RM99. This can start the purchase process without them having to visit the showroom so soon.
With the HondaTouch application on their smartphone or tablet, Honda owners can enjoy a faster and simpler aftersales service appointment process prior to visiting the dealerships. The app has 10 features which are particularly useful for owners, providing them with accessibility to their vehicle and its information wherever they are.
In line with Honda’s aim to be a company that society wants to exist, Honda Malaysia has been reaching out to assist local communities who are facing hardships due to the pandemic and prolonged lockdown. The company undertook initiatives such as contributing packs comprising food, beverages and personal care products to patients under quarantine, providing the BR-V to staff at the Low-Risk Treatment Centre (PKRC) in the Melaka International Trade Centre (MITC) for daily commute, and distributing necessities to charity homes.
Honda Malaysia reports that the ongoing restrictions of the Full Movement Control Order (FMCO) have impacted its business significantly, with sales of new vehicles falling by 52% during the May to July 2021 (compared to the same period in 2020). In compliance with government orders, the Company has suspended its business operations. These include closures of showrooms, its marketing and sales office as well as the assembly plant in Pegoh, Melaka.
However, aftersales services are allowed to operate at selected authorised Honda dealerships nationwide. Conditions for operations are that only minimal manpower is allowed and appointments must be made in advance. The HondaTouch app provides an easy way to make an appointment. Standard Operating Procedures (SOPs) must also be observed and customers can only go to a service centre if it is within 10 kms of their home.
Showrooms cannot conduct business activities but selected authorised service centres (below) are permitted to provide aftersales support and emergency assistance.
Only 5,700 units sold in 3 months
“With only certain aftersales services allowed and sales and manufacturing operations halted, it is no surprise that sales have plunged. Honda Malaysia saw a decline of 52% in car sales for the year-on-year period of May to July 2021. We sold about 5,700 units in this period compared to close to 12,000 units sold in the same period last year when the country was under a Conditional Movement Control Order (CMCO) and then Recovery Movement Control Order (RMCO),” said Madoka Chujo, Honda Malaysia’s Managing Director and CEO.
She added that the company fully supports the Malaysian government’s efforts to curb the spread of COVID-19 by adhering to the restrictions. However, there is concern that a ‘domino effect’ is occurring on all 101 authorised dealers who face financial difficulties. There is the uncertainty of employment for sales and service advisors as well as other staff. The sales advisors, especially, have been severely affected as their income is largely dependent on commissions earned through vehicle sales.
Salespeople in car companies are especially affected since much of their income comes from commissions for new vehicle sales. Right now, they can’t do any selling activities as showrooms remain closed.
Helping Honda associates
“Honda Malaysia understands the hardship that the dealers and Honda associates are going through, and hence, the company is trying to do its best to assist them during the difficult times. One of the efforts is by registering Honda associates under the Public-Private Partnership Industrial COVID-19 Immunisation Programme (PIKAS) to expedite the country’s rate of vaccination,” she said.
The company targets to achieve 100% of first dose vaccination for all its associates by mid-August 2021. As Malaysia has one of the world’s fastest vaccination rates, the company hopes to achieve its vaccination target and subsequently the nationwide vaccination programme will help create a safer environment for Malaysians. “Honda Malaysia is appreciative of the hard work of all the frontliners who have been working tirelessly to help fight the pandemic,” Ms. Chujo added.
The Honda Malaysia assembly plant in Melaka is presently shut down in compliance with the FMCO.
Effect on local suppliers too
She also revealed that the prolonged business closure has impacted Honda Malaysia’s new model production due to no testing conducted in the manufacturing facility. Furthermore, the company’s supply chain and export of parts are also affected.
“The automotive industry supports a wide network of local components and parts suppliers that comprises a few tiers. These suppliers might not be able to sustain their operations and this will subsequently affect the overall supply chain. The current extended lockdown and no visibility on business resumption timeframe have impacted planning and overall investment of the automotive marques,” she explained.
Honda Malaysia hopes that early resumption of the automotive sector activities will be possible under strict SOPs and guidelines set by the government. This can avoid the long-term impact such as retrenchment of employees and can help to prevent potential business closures among the supply chain.
Honda Malaysia has again claimed the No.1 position in the Non-National segment of the Malaysian car market, with a total of 60,469 vehicle delivered in 2020. This is the sixth consecutive year that the company has been in the lead position after the two Malaysian makes.
Announcing the achievement, Honda Malaysia’s Managing Director & CEO, Toichi Ishiyama, said: “The year 2020 may have been challenging but we have managed to maintain our undisputed No.1 position in the Non-National Segment for the sixth consecutive and for that, we are truly humbled by the support we have received.”
City accounted for 34% of sales
Mr. Ishiyama said that the City, being the most popular Non-National B-segment model among Malaysians, was the biggest contributor (34%) to the total volume. “Officially launched in October 2020, the all-new City recorded highest monthly sales in its history with over 5,500 units sold in the month of December 2020. It also received positive response from the market with more than 15,200 bookings to date, making it one of the highest booking figures for a newly launched model in Honda Malaysia in the second half of 2020.
The second best-selling model was the Civic, followed by the HR-V, which contributed 20% and 17% to the total sales volume, respectively.
Mr. Ishiyama also expressed gratitude to the Malaysian government extending the sales tax exemption incentive. “We sincerely thank the Malaysian government for the extension of sales tax exemption until June 30, 2021 which will allow many Malaysians to purchase cars with extra savings. As we move on in 2021, we will continue to support the government’s efforts to curb the pandemic which is still active nationwide,” he said.
City RS e:HEV due this month
While the City S, V and E variants (priced from RM74,191.27, excluding 10% sales tax) with the new 1.5-litre DOHC i-VTEC powertrain have been on sale since October, the all-new City RS e:HEV variant will be available from this month. The RS e:HEV variant is a world-first with its intelligent Multi-Mode Drive (i-MMD) powertrain.
The new City RS e:HEV will be available this month.
This electrified powertrain is an advanced hybrid powertrain with 2 motors and an Electric Continuous Variable Transmission (e-CVT). Together with a 1.5-litre petrol engine, the i-MMD powertrain can generate up to 253 Nm of torque, an exceptional output for its size. Maximum power output is 108 ps which can take the City beyond 170 km/h and yet consume fuel at a claimed rate of 26.5 kms/litre.
