Honda says new models and a leaner organization will help it rebound in Europe in 2015 after seven years of falling sales and struggles to earn a profit.
Japan’s third-largest automaker after Toyota and Nissan has declined from being a major player among Asian brands in Europe to a niche player after its annual vehicle sales fell by more than half since 2007.
A combination of job cuts at its UK factory and the launch of a new crossover in one of Europe’s fastest-growing segments should help the automaker increase unit sales and return to profitability in the region.
“We’ve been waiting a few years for new product and now it’s coming,” Honda Europe sales chief Philip Ross told Automotive New Europe. Ross added that Honda also is in a better financial position after reporting just one profitable year in Europe since 2007. “I believe we are now a lean organization that can move forward,” Ross said. “Profitability will come along with that.”
A key launch will be the HR-V subcompact crossover, which will go on sale in Europe next year. Sold as the Vezel in Japan, the subcompact revives in Europe the HR-V name that Honda last used in the region in 2006. Honda expects to win new customers, especially younger buyers, with the HR-V. The model will compete in a segment that IHS Automotive predicts will double in size in Europe to 1 million units by 2020 from a forecast of more than 500,000 this year. Ross declined to give sales expectations for the vehicle, saying only that he hopes the HR-V also will bring down the average age of the automaker’s customers in Europe.
IHS estimates Honda will sell about 30,000 units of the HR-V in Europe in 2016, the vehicle’s first full year of availability in the market. Based on existing volumes, that level of sales would make the HR-V the company’s No. 3 seller in the region after the CR-V compact crossover and Civic compact hatchback.
Honda also will begin sales of its new-generation Jazz subcompact next year and is making changes to the CR-V to improve its fuel economy in a bid to lure more buyers. The power output of the CR-V’s 1.6-liter diesel will be increased next year to 160 hp from 130 hp, allowing Honda to drop the CR-V’s less frugal 2.2-liter diesel. The company also will equip the CR-V with a nine-speed automatic transmission from German supplier ZF, which already offers variants of the gearbox in the Range Rover Evoque and Jeep Cherokee.