Dongfeng Honda to introduce new dealership evaluation system, aims to sell over 500000 vehicles in 2015

Gasgoo.com (Shanghai September 4) - As Dongfeng Honda dealerships in Beijing halt procurement new vehicles, media reports of confrontations between dealerships and the joint venture have begun showing up. At last month's Chengdu Motor Show, Dongfeng Honda Executive Vice President Chen Binbo officially commented on the matter. In a statement quoted by the Beijing Times, Mr. Chen explained that Beijing dealerships' inability to procure new vehicles from the manufacturer is due to the JV's reorganization of its dealership inventory structure as it prepares for market releases of new models. Currently Dongfeng Honda dealerships rely excessively on sales of the CR-V, which in turn hinders sales of the JV's models. In response, Dongfeng Honda will implement a dealership evaluation system; dealerships performing the poorest in conducting sales work for the JV's newest products will be eliminated.

According to statistics from the China Association of Automobile Manufacturers, Dongfeng Honda sold just 5,996 CR-V SUVs this July; that amount is 63 percent less than the number sold the previous month and less than 56 percent than the number sold a year ago. The fall in CR-V sales was a major factor behind the overall decline in Japanese brands' automobile sales in July.

Mr. Chen explained that some Dongfeng Honda dealerships were excessively reliant on CR-V sales, and have not demonstrated initiative in opening new markets. As the CR-V isn't as competitive as it used to be, Dongfeng Honda's total sales have started to suffer. As such, Dongfeng Honda is aiming to reform its dealership sales structure. Mr. Chen explains: "Our work is focusing on reshaping our entire dealership team. By creating a brand new evaluation system, we will maintain our relationship with the dealerships. Dealerships that can't keep up with the pace of Dongfeng Honda's introduction of new models will be eliminated."

Dongfeng Honda is currently aiming to introduce new flagship models. Both the New Spirior and XR-V compact made their debut at the Chengdu show. Mr. Chen expect these two vehicles to play a pivotal role in helping the JV complete its target of 500,000 sales in 2014. Annual sales for each of the new models are expected to be around 70,000 units.

Mr. Chen also revealed that Dongfeng Honda will release a brand new model next year. The JV will also introduce a new series of turbocharged engines in 1.0 L, 1.5 and 2.0 L sizes.