Building the case to change how Honda sells cars

Honda was considering a national change to how it sold new cars. The aim was a more sustainable business and a consistent customer experience across its dealer network.

Dealers previously bought vehicles from Honda and negotiated resale prices with customers. Under the proposed agency model, Honda would own the stock and set national prices, while dealers earned a commission on each sale.

This changed who held inventory, controlled pricing and earned margin. Honda needed to understand the financial consequences and whether the business could make the transition before deciding to proceed.

At Monitor Deloitte, I developed the business case and financial model for the proposed change. I assessed the impact on vehicle margins, dealer commissions, stock ownership and the cash tied up in inventory, as well as the costs of the transition.

I also worked through the operating changes needed to make the model feasible. By connecting the financial analysis with operational planning, I helped assess both the economics of the new model and what it would take to put it into practice.

The business case set out the financial consequences, transition costs and operating requirements of a national change before Honda committed to it. It helped the company assess the proposed model as a business decision, with its costs and practical demands understood.

Honda announced the change in March 2020 and introduced agency sales on 1 July 2021. The rollout established national drive-away pricing, central ownership of new-vehicle stock and commission-based sales across its Australian network.