After seven years of falling sales and struggles to earn a profit, Honda is optimistic that new models and a revamped organization will help it revive its European subsidiary.
Unlike Toyota and Nissan who remain major players in Europe, Honda has become a niche automaker in recent years, with its annual sales dropping by more than half since 2007. But now Honda has reasons to be optimistic about its European operations, as the launch of the new HR-V crossover and job cuts at its UK plant will help it 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 AutoNew Europe. The executive said Honda is now 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. Profitability will come along with that,” he added.
Going on sale in Europe next year, the HR-V subcompact crossover is a key launch for Honda as the new model is expected to win new customers, especially younger buyers. Reviving a nameplate last used in the region in 2006, the HR-V will compete in a segment that is expected to double in size in Europe to 1 million units by 2020, compared to more than 500,000 in 2014.
While Ross declined to offer sales expectations for the vehicle, IHS Automotive 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. That would make it Honda’s third best-selling vehicle in the region after the CR-V compact crossover and Civic compact hatchback.
Honda sold 139,712 vehicles in Europe last year, accounting for a market share of just 1.1 percent. In 2007, Honda’s sales in Europe reached a peak of 313,484 vehicles, which gave it a market share of 2.0 percent.
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