Monday, May 14, 2012

Gulf News

Dubai: With the new CR-V in its showrooms, Hondas UAE dealership Al-Futtaim Honda is not just looking for improved sales of the flagship model. It wants a wholesale change in the way Hondas revamped four-wheel drive models the Pilot, Odyssey and now the CR-V are perceived by buyers.

That will include finding a favourable response from fleet operators, a category that has traditionally not been aggressively pursued by the Japanese brand.

The SUV market has now been taken very seriously by Honda and its been recognised theres a broader opportunity for growth in the GCC, Mark Kass, regional managing director, Al-Futtaim Honda, said. The intention is to pull in buyers from the competition.

The new CR-V, available in three grades, starts from Dh99,000 and goes up to Dh119,000. Incidentally, this is lower than that for the outgoing version.

Upgrading features

On the specifications, Honda did the same thing for the new Pilot, launched last October, and the Odyssey introduced in January 2011. The specifications in each of the grades were jazzed up, and for the Touring range, this meant upgraded satellite navigation and DVD entertainment features became standard.

We never had a problem with the models positioning. What we did not have earlier were the specifications, Kass said.

Expanding offerings

Honda is broadening the number of grades available to each model. This way, it equally wants to appeal to the fleet customer at the entry grade and at the top end for the individual buyer through improved specs.

The three four-wheel drive models could together contribute 30 per cent of Al-Futtaim Hondas unit sales this year, which would be 10 per cent higher than last years. If that happens, the higher margins on the range would also have a favourable impact on the bottom-line.

Within the wider automotive market, the SUV category has easily been outpacing growth for the sedans. The market feedback is that the gap could widen further in the second half of the year as all of the leading contenders slug it out with their new model year ranges and some aggressive prices to go with it.

On whether Honda might need another brand new SUV model to be a genuine contender, Kass said: The SUV line-up in the Middle East is evolving; naturally, we are keen to expand the existing model range by way of new entrants. Albeit this will not happen in the short term.

Supply constraints: Stocks to normalise soon

By June 1, Al-Futtaim Honda would have finally gotten over the supply constraints caused by last years tsunami in Japan and the floods in Thailand on the Honda range.

Hondas performance in the UAE over the first quarter has been flat over 2011, Mark Kass said. If our numbers are flat, it would mean that our market share slightly decreased. We cant deny that.

We expect stocks to normalise by the end of May and we would then be ready to join battle for a higher share from June.

All of which had Al-Futtaim Honda work on its used-car programme, and which has been reaping dividends now. There have been some surprises too.

Used-car demand for Odyssey and Pilot is unprecedented and we are getting residual values of 80 per cent on models that are a year old against the 55-60 per cent which is the average, Kass said. We have never had this in a long, long time.

By Manoj Nair, Associate Editor

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