HONDA INTERVIEW: New boss to ‘kick-start’ Honda

Honda‘s new fleet boss Ed Hummel arrived at the company with a clear vision of how best to achieve better results – and that was to shake things up.

Formerly car leasing manager at VW, Hummel spent the first three months following his appointment in April speaking to customers, dealers, leasing companies, suppliers and Honda’s fleet team to “suss out what else we can do to kick-start the corporate energy”, admitting in the process that the company previously “didn’t have a clear corporate strategy”.

Honda‘s near-absence from fleet has been notable over recent years, in part due to uncompetitive CO2 emissions against its rivals. There’s also been no Civic diesel available in the past 12 months or so, which traditionally would be a huge business seller.

But the Japanese carmaker’s fleet ambitions in the UK are set to change – the new Civic, with “incredible emissions and power”, will go on sale at the beginning of 2012, after debuting at the Frankfurt motor show later this month.

Honda sold 23,000 vehicles to fleet in 2010; Hummel wants this to be 30,000 by 2014. A humble growth you might think, but keep in mind, that Honda is strongly opposed to distress selling; indeed, last year it didn’t sell a single car direct to major daily rental companies. This trend will continue, so the hoped-for 7000-car increase will be purely to the contract hire and leasing field.

Hummel replaced Graham Avent, who left Honda late last year, and says the brand currently has 2000 business customers: “The challenge is for us to speak to more customers. We are selling to 2000 but in the UK there’s about 150,000 companies so we’ve got to up our penetration.

“The focus for our national sales team is 100-plus fleets of which there are 3000 in the UK. We’re selling to 10% of these. We want our corporate managers to talk to them over the next 12 months.” He adds that the brand has been better with 100+ customers historically.

Overall, Hummel wants to see Honda with up to 4000 fleet customers in the future. “It comes back to seeing more customers. Honda is not high up the priority list when leasing companies are selling cars. Our leasing team needs to spend more time – better product information, better communication, and product.” He has tasked them with doubling the number of meetings with end-customers and leasing firms to ensure this starts to happen.

For smaller businesses, Hummel has set up a group of Honda’s 10 biggest corporate dealers who will meet quarterly to feed back to Hummel how the network can better achieve SME sales. Fifty of 183 dealers are focusing on corporate activity. “There are some areas we can get better in quickly. One of these is the public sector – a market that buys 45,000 cars a year. We believe that with the Jazz, made in Britain and low running costs, we have an excellent proposition. We need to be sharper with that, for example, by dealers talking to local libraries and county councils,” says Hummel.

He acknowledges it has been a difficult couple of years for Honda in the UK, “particularly around CO2 emissions”. But with the orders for the new Civic opening this month, there are “great CO2 cars coming” (see box, above). The Insight is also proving popular with fleets, says Hummel, even though the model still hasn’t managed to reach sub-100g/km CO2. This sticking point will change in time for the BIK tax rate changes in April 2012, according to insiders.

The revised Accord, available now, will also make its mark with a sub-140g/km manual and a sub-160g/km automatic “which should open us up to some new customers”, thinks Hummel.

He concludes: “At the moment we are 3% of leasing companies’ book; if we were to become 6% of their book, that would be a good step. Honda is a different proposition to the German brands [which make up 50% of suppliers’ business]. Lots of people are into Honda. It’s about getting people into the cars in the first place. It is our serious intent to raise awareness in the corporate sector.”