Why Honda is confident it will meet sales targets: New ZR-V and CR-V to lead resurgence for the Japanese brand

Honda Australia is confident that the arrival of the all-new ZR-V and new-generation CR-V will lead it back to sales success.

After taking a sales dive when it switched to its 'agency model' of selling cars, the brand's current leader believes these new models will be the final piece that helps it recover.

Prior to its change in operations, Honda sold more than 43,000 cars in 2019 and more than 29,000 in 2020, but in 2021 it dropped to just 17,652 as a combination of its new business model and supply constraints hit the brand hard.

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Honda Australia's previous management set the goal of 20,000 sales per year using the 'agency model' - which cuts out the dealer and has customers buy directly from the car maker - but ended 2022 recording just 14,215 sales.

Carolyn McMahon, the more-recently appointed chief operating officer for Honda Australia, told CarsGuide that she's confident that the company is now on-track to reach that original expectation of 20,000 sales that's to its new SUV models.

"When we set out with the new agency model, 20k was the business case that we based the model on," McMahon said. "Because of COVID we didn't have that supply so there was a lot of commentary around 'it isn't working for Honda' and 'Honda is becoming irrelevant' but it's not because we have no customer demand, it was purely supply."

McMahon's confidence is driven by what she claims is strong customer interest in both the ZR-V and CR-V, as well as the Civic small car which has been hurt by ongoing supply constraints. The ZR-V is the brand's first new nameplate in 20 years and has recently hit the market, while the new, larger CR-V is due in local showrooms by the end of the year.

The ZR-V is the brand’s first new nameplate in 20 years and has recently hit the market.

With these two models introduced, McMahon is adamant that Honda will soon be on course to hit its sales target by 2024.

"Obviously volume and production have been a challenge for us, but we will see a significant uplift in our volume later this year," she said.

"[I'm] just back from Bangkok [where Civic and CR-V are built], we are locking in some really great support and our Honda centres are getting ready to deliver that 20,000 mark in Q4 this year and first quarter next year. So really looking forward to that, because demand is really, really strong for us. So even though you're not seeing it in the retail numbers certainly our order bank is really, really strong."

Despite the optimism the brand is currently tracking to sell slightly more than 13,000 cars in 2023, but the influx of the ZR-V and CR-V in the second half of the year should improve that.

Demand for the ZR-V has been strong initially with Honda claiming that supply for the ZR-V e:HEV hybrid model is already out until December.