Why Honda Cars PH will never open up to the taxi market

AUTO NEWS

According to Honda Cars Philippines president Noriyuki Takakura

During last night's launch of the refreshed 2018 Honda HR-V, we were able to spend some time and have a lengthy chat with Noriyuki Takakura, the president and general manager of Honda Cars Philippines Inc. (HCPI). 

Among the many topics of our brief discussion was a question that had been at the back of our minds since the 1990's: Why are there no Honda's plying the roads as taxis? 

The answer from HCPI's president regarding the taxi question is simple.

“It's not our strategy,” said Noriyuki Takakura, HCPI president. 

The question was brought up given the current recessed state of the auto industry following the implementation of the new tax law. The fear of an impending tax increase prompted many buyers to advance their purchases to avoid the new, higher excise taxes in 2017, all while subsequently dropping the volume of cars sold in 2018 thus far compared to the same period in 2017. 

Takakura elaborated that while catering to the taxi market is an excellent means of boosting sales volume, their company's strategy is all about the customer's ownership experience of a Honda automobile. For a customer, seeing the same model they own on the streets as a for-hire taxicab will adversely affect that.

The executive also said that catering to taxi fleets isn't as profitable as it may seem on the surface. Large volume clients negotiate for massive discounts, something that Honda doesn't do. 

“Look at the United States. Companies like Toyota tend to offer $1000 to $2000 discounts for customers to get volume,” said Takakura. “Honda USA never offers big discounts like that; if ever, it's less than $1000.”

The head of HCPI also said that big discounts and seeing Hondas operating as taxicabs would also negatively affect resale value, something that their customers will not appreciate.

While Hondas are not allowed (because of a reported not-for-taxi-use clause in the delivery receipt) for taxi fleets, they have been "permitted" to be used as vehicles for ride-sharing/ride-hailing apps given the private status of the cars. 

What do you think about Honda's no-taxi strategy?

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