Honda’s hot Civic comes with hefty price tag

Honda's Irish importer, Universal Honda, announced the price for its dramatic Civic Type-R this week – €48,750, a price which makes it significantly more expensive than the rival VW Golf R, and close to the base price for the Audi S3, a car which would carry a significantly greater level of badge cachet.

To be fair to Honda, that price does include a good deal of standard equipment. All models feature Sports Seats finished in red and black suede-type material, unique Type R body styling kit, LED headlights, 19” black gloss alloys, keyless entry and start, Honda Connect touchscreen infotainment system, +R mode, city-brake active system and climate control. The only option – apart from paint colour – will be the GT pack, available for an additional €2,200. For the exterior of the Civic Type R the GT Pack adds signature red highlights to the front and rear splitters and a wide range of convenience features, including Satellite Navigation, upgraded high-power audio system, front and rear parking sensors, dusk-sensing headlamps, rain-sensing automatic wipers and electric-fold door mirrors.

The GT pack also includes more safety equipment with the addition of Honda’s Dynamic Safety Pack. This comprises a suite of sensor-based safety technologies, including Forward Collision Warning, Lane Departure Warning, Traffic Sign Recognition System, High-Beam Support System, Blind Spot Information and Cross Traffic Monitor.

Is that enough to justify a significant premium over and above the Golf R? After all, that car has been widely praised this year as being one of the very best hot hatches one can buy, and last year’s price cut brought the 300hp 4WD Golf down close to what one might pay for a 230hp Golf GTI with some optional extras.

Emmet Kavanagh, Universal Honda’s marketing director, told The Irish Times that he thinks the Type-R, far from being overpriced, actually offers considerable value for money. “We believe that the performance, power and equipment on offer in the Civic Type R are well matched to the retail price at €48,750. We feel this is a competitive price in the performance car sector. The Civic offers a class-leading 310hp of power, and a level of performance technology and equipment which are unrivalled in the class, such as the standard +R Mode and ADS Adaptive Damper System, similar technology in rival cars can cost €1,000s. The Civic is also a highly specified car with features such as the Honda Connect, City-Brake Active System, Suede Sports Seats and LED Headlights all featuring as standard. The Civic has proven on track and road that it offers more than the class-leading power figures suggest - the Civic was developed from the outset as a ‘Race Car for the Road’, and given the level of engineering and performance on offer we feel it will appeal to a very different set of buyers than those of other ‘hot hatch’ models.

“The entry level 5dr Golf R is priced at €43,915 in 5dr form, for a price difference of €4,835, however specification levels do differ between the cars.”

There were some suggestions at the international launch that Honda would sell Civic Type-Rs at a loss across Europe, in order to keep the price in the same ballpark as the Golf R's and to try and call back some of the motorsports enthusiasm that has been squandered with the failure of Honda's F1 return, with McLaren, which has not even come close to rekindling its 1988-1991 dominance.

Mr Kavanagh though told us that “we don’t disclose margin levels on our models. We will not be releasing volume plans for Civic Type R, the vehicle is now open for orders at Dealers nationwide, and initial customer interest is strong with vehicles already on order.”

Honda could do with some good news right now. In Europe, it currently holds a market share of 1.1 per cent, around half what it held at its peak in 2007-2008. The brand is also shedding models, canning sales of the CR-Z hybrid coupe, the Insight hybrid hatchback and the Accord saloon and estate, all of which fell rather flat on their sales faces. It has cut jobs and reduced output at its major European factory in Swindon, in the UK, which makes the CR-V and Civic.

It is in the midst of a major model range regeneration though, which Mr Kavanagh was keen to point out. "Honda is currently in the middle one of the largest model renewal programmes it has ever undertaken in Europe. By the end of this year we will have one of the youngest ranges in Europe, operating in the key volume and growth segments. We will be introducing 6 new or updated models this year - Jazz, Civic, HR-V, CR-V, Civic Type R and NSX, many featuring new powertrains and technologies developed specifically for the European market. The CR-Z and Insight had reached the end of their lifecycle, and Honda have exciting new alternative powertrain models in development, as previewed by our FCV Concept which points the way to our 3rd generation production Fuel Cell model, due on sale in Europe in 2016. In the interim, our decision has been to concentrate on diesel which is more suited to the European market, along with new performance models. With regards to Accord, the market for D Segment saloons has fallen dramatically in recent years  in Europe, and is a segment in which margin pressures are extremely strong with high levels of fleet activity across Europe. As private buyers continue to switch to SUVs, our focus has been to create a leading SUV offering in the HR-V and CR-V in line with buyer demands."

In Ireland, Honda also needs a boost. Its sales thus far thus year have risen, but only by a relatively disagppotining ten per cent, compared to a 30 per cent rise in the market as a whole. That, Kavanagh puts down to the late arrival in March of the updated Civic, and the fact that key new models such as the new Jazz and the HR-V crossover are only now coming on stream. "Honda registrations in Ireland have increased 10% for 2015 year to date, however this result is due to significant product changeover and lifecycle reasons, and masks a much more successful growth in sales in recent months. In early 151, Honda registrations were impacted by the imminent arrival of the updated Civic and CR-V. These model arrived in March and Honda's performance has been significantly stronger in the intervening months. The Honda 152 performance has been one of the strongest in the market with a 73 per cent increase in registrations based on very strong demand for Civic and CR-V, up 79 per cent and 169 per cent respectively. Once new Jazz and HR-V arrive to the market, joining the Civic and CR-V, we expect considerable growth for Honda in 2016."

That at least seems to be in line with what the major industry analysts suspect. IHS Automotive has predicted that the Jazz and HR-V should push Honda’s European sales back up to where they were and beyond, with a potential 200,000 annual sales by 2018 – three times the number of Honda’s sold in Europe last year. A three-fold increase in sales in Ireland would doubtless be welcomed by Honda and its dealers, but would still only peg it to around a third of arch-rival Toyota’s sales. With Honda’s range of cars being so generally well received by critics, where’s the missing link between good cars and healthy sales?