Monday 8 September 08 - 04:55
 

Dealer Expansion

Honda says training is the dealer's key

Honda is set to expand its outboard dealer network in Europe and the UK. Peter Nash went to Italy and Colnbrook to find out more.
Cirrus RIB and BF150 make a match
Cirrus RIB and BF150 make a match

Lago Maggiore sounds an ideal trip to a journalist's ears.

The thought of flashing round an Italian lake in a variety of boats, all powered by Honda's latest BF150, was irresistible.

It's a tough job, as they say.

Well, that's what I say. But nobody believes me. Even when I tell them it rained - almost at torrential level - for most of the time we were there.

The shot you see here of the lake was taken by Sebastian Gowar-Cliffe of Cirrus the day he delivered his new RIBs for the event. Us journos didn't get to see those beautiful mountains through the dank mist.

OK, so it was Italian rain.

Tempered with Italian beer.

And Italian food. The importance of the event was judged by the number of top people from Honda, including Mr Ike, the top Power Equipment Man from Japan.

And as well as launching the BF150 and other latest bits of kit, such as the "refreshed" BF 2.3, BF 25/30/40 and 50 engines, the event set the scene for a dramatic enlargement of the Honda network throughout Europe and the UK.

This, in itself, brought another day out, later in the year, to the less than Italianlooking industrial estate at Colnbrook, just west of Heathrow, where the Honda Institute can be found.

This £multimillion development is the company's training base in the UK and an oasis in the grubby Colnbrook surroundings.

It offers training for anything a Honda dealer might need, from office and IT skills to engineering and recruitment: and it boasts one of the most impressive workshops you have ever seen.

Petrolhead's delight Clean? You could eat your lunch off the workshop floor.

And it's a petrolhead's delight.

Unfortunately the latest Fireblade and CBR600RR were at the NEC for a show, but all the other cars, bikes, outboards and ATVs were there.

The Lago Maggiore presentation made it obvious the network expansion was across all European operations. As Phill Haynes, Honda's UK manager of national sales for ATV and marine pointed out:

"Honda sees growth in Europe restricted by some networks - their width, coverage and the type of dealers they have."

Europe has a distinct view of going further and quicker into a solus operated outboard business, he added.

And network growth has already been a major focus of Honda UK, basically because the UK network is well established within boat sales and re-engining, it is closer to retailing than mainland Europe dealerships.

"For some countries it's a 10 year goal, " said Haynes. "For some it's possibly a 20 year goal.

For the UK, we're looking at a two or three-year programme of taking more of existing dealers business and complementing it with further strategic transom sales appointments to grow the network."

And why expand now, I asked?

"It's not a sudden decision, " said Haynes. "It's always been our aim." Honda's product and customer range has increased, he added, and the company has an increasing requirement to service the customer: "For example our dealers are at bursting point from pre-season preparation work, " he said.

"But as the market moves more towards 4-stroke, we have a bigger opportunity and that will give us a requirement for a larger number of dealers, covering an even larger and varied number of customers."

The European market has a different focus to the UK, explained Haynes. They are on the track to change dealerships from another outboard manufacturer to Honda. It's a big refranchising statement.

In the UK, he said, we are looking for where we have an opportunity to sell something, where can we find a partner who wants to make money out of Honda and outboards.

17 more over 3 years At present Honda has 61 marine dealers and wants to increase that number by 17 over the three year programme. Is that a difficult task, I asked Gavin Baker, Honda's network development manager, Honda (UK) Power Equipment.

"It is, " he said, "given that our bases are pretty well covered."

Honda has a reasonable national coverage in the UK at the moment, Baker added. "We reckon we cover most of the major UK boating centres with a few notable exceptions and gaps. There's no dealer on the south Wales coast, for example, and we need some representation on the east side of the country as well."

So how are you going to grow the network, I asked. How do you go about finding new dealers?

It's a progression that follows the Honda Philosophy, says Haynes.

As a company, Honda is big on philosophy. It's the company's way of life and the principles are very simple: respect for the individual and cherish your dreams.

And dreams are equally big, with the company strapline of "The Power of Dreams" appearing on all advertisements and promotional material.

Haynes outlined the first two steps along Honda's philosophical route towards a complete dealer network.

"There are two common streams in any business we deal with, " he said. "Are the people right for Honda and does the partnership make sense?"

The company has a set of requirements for any budding dealership that includes things like having at least one dedicated marine sales specialist and one Honda trained technician to the requirement to keep premises neat, tidy and presentable.

The showroom must be capable of displaying Honda outboard engines and the workshop equipped to service and repair Honda outboards.

"We don't offer a sales only franchise or a service only franchise, " said Baker.

Make money

"We want the dealer to be able to make money and we want them to furnish our customer with what they need, " said Haynes. "The more they can make out of our products, the more they are going to give our customers what they want, with minimum inconvenience and the best value."

"We don't want just to put lots of red dots on the map, " said Baker. "We want our customers to be able to go there in five or 10 years' time.

The relationship the Honda customer has is with the dealer."

As to what we can offer the dealer, said Haynes, our market share is healthy. Year to date we're 19.1% of Total Market including 2-stroke which we don't make. Marine Power - Mercury/Mariner - is No 1 on 31.5%, Yamaha 25.0%. We have a growth of 6.1% points - that's actual, not a percentage of our market share.

If we look back to June and July 2003, he said, we took over second place. We were 22.7 and Yamaha 21.2. Remember, Yamaha is 2-stroke and 4stroke and insist on a solus outboard franchise. We're only 4-stroke, which is soon to be the advantage. We've taken giant leaps. At the end of 2003 we are third, but very close to second position. Increased market share is just a result of our activity, it's not our goal; more customers, more profit and a more attractive franchise are our goals.

"Of all our different propositions, " said Baker, "we have the best selling small horsepower engine, the lightest 5hp, the lightest and most powerful 40hp and 50hp categories, the most economical 90hp, brand new 150 and 225hp and our BF2.3 is the biggest selling 4-stroke engine in the market. On top of that we have partnerships, not just contracts or dealer accounts."

"So we're No 1 in 4-strokes, " said Haynes, "and we've been ahead of Yamaha in three out of the last ten months of the financial year (ending March 31, 2004). Overall, it has been our best year ever for all market yardsticks, volume, value or horsepower. And it will be our dealers' best year ever too."

On top of those, Honda offers a 5-year warranty that's free, dealers don't have to subsidise it at all and it guarantees service work, (we even give a warranty on our race engines, said Haynes).

And the dealers can expect to make a straight 20% return.

"All our dealers get the same and most can expect to retain near retail margin on most sales, " said Haynes. "The only way they can beat that is by achieving a volume and value target to get additional bonus on 40hp+ and that too is available to them all. That commits them to a level of stock and a level of business."

More support comes from brand promotion. "We believe it's up to the dealers to promote themselves locally.

It's our job to market the Honda brand and drive people into their showrooms, and we do" said Baker. Having said that, he added, area managers do have a tactical budget they can use in a variety of ways.

NBS deal

And Honda is big at boat shows. "Look at our deal with National Boat Shows for Honda, " said Haynes. The Southampton and London shows aren't just boat shows, he said. They are leisure shows that have an influence on the area and are a focus for the business and the brand. For cars, bikes, lawnmowers and generators as well as marine; more people own a Honda engine of some form than own a Ford in the UK and Honda have more outlets in the UK than MacDonald's.

Training also forms a large part of the Honda package.

"That's where the Institute comes in, " said Haynes. "When you join a new company you get an induction process.

When a dealer joins the Honda network there's a similar process. They've been selected because they have the basic ingredients - people/ premises, etc - for the kind of business we want them to become. The Institute will develop the business and help the dealers get the skills they need to excel in all those separate areas and to make sure all the employees reach the minimum standard of training in all the product areas they have."

While most Honda dealer support is free, charges are made for some training, albeit at a heavily subsidised rate.

If it's free, it has no real value, said Haynes. Charge a tenner for entry and you get people who want to get value out of it.

Product familiarisation, product knowledge and Honda Philosophy courses are all free. But it will cost a dealership £100 to bring a service technician up to Honda standards.

Training is split between the Institute and the dealerships.

"We 'll take our training truck round the dealerships, giving technicians half-day courses or on-going training, " said Baker.

"For six months we go to them with the truck. For the other six months they'll come to the Institute."

Further encouragement comes from Honda's internal awards - Technician of the Year and Parts Advisor of the Year. Technicians come from all Honda's market sectors and, in fact, Robert Lane from Seamark Nunn took the TOTY award last year.

"It generates a huge amount of media coverage, " said Baker.

"People read about a technician from their local Honda dealership winning the TOTY and they'll take their Fireblade, or whatever, in and ask that the winner works on their Honda product."

The Institute isn't just a technical facility. The nine seminar rooms are all equipped with integrated audio visual equipment. Sales seminars, marketing seminars, personnel development seminars and more, even whilst we were there some European staff were using the facilities. But for our UK dealer network, "It's not all about spanners and spark plugs, " said Haynes. "If a dealer wants to train his employees and build a successful business, we'll do our best to help him."

VTEC

You can see the heart of the BF150 under the bonnet of a Honda Accord.

And the 2.3 litre, DOHC, 16 valve engine brings to boating one of Honda's great leaps ahead in the form of VTEC.

The acronym stands for Variable valve Timing and lift Electronic Control. The acronym should have been VVTLEC, but perhaps the ad men had a hand in the abbreviated version.

Derived from the company's Formula One engines, the system uses two inlet and two exhaust valves.

But the inlet camshaft has a third, high lift, long duration lobe between the conventional inlet lobes. A free-running rocker rides the high lift lobe.

At low revs the two valves operate on their own cam lobes, giving low lift and short duration - perfect for low speed running efficiency. But as soon as the engine gets to 4,500rpm, the third rocker is locked onto the other two so all three rockers and both inlet valves ride the high lift, long duration lobe.

Car drivers can't praise VTEC highly enough, with its seamless transition to the more powerful lift/duration configuration providing more efficient breathing as the revs rise. And while VTEC use on Honda's motorcycles has its critics, its use in the BF150 outboard ought to give the same level of confidence and performance reported by car drivers.

Images for this article - click to enlarge

Cirrus RIB and BF150 make a match
This is where youve seen the BF150 before - under the bonnet of a Honda Accord
Haynes:a 2 or 3 year programme
Baker:a few notable exceptions

Unless otherwise stated, all images copyright © Mercator Media 2008. This does not exclude the owner's assertion of copyright over the material.

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