Skip to main content
Open this photo in gallery:

Dave Gardner, president of Honda Canada, sits in a 1977 Civic at Honda Canada headquarters in Markham, Ont.Chris Donovan/The Globe and Mail

Dave Gardner has a challenge and he’s not shy about admitting it.

As president of Honda Canada Inc., Mr. Gardner is running a car company whose sales are split 50-50 between passenger cars and trucks. That seems like a reasonable ratio, but the market has shifted dramatically to trucks – more than 70 per cent of Canadians who bought vehicles last month put new trucks in their driveways.

“When we look at the segments we compete in … they’ve basically been stagnant for the past four years,” Mr. Gardner says. “When we look out into the future we see them contracting as people move from passenger cars into trucks.”

The shift in the market in Canada is a problem not just for Honda, but also for some of its fellow Japan-based rivals and other car makers that have missed out on the crossover boom and are rushing to bring new vehicles to that segment, which has taken the place of the traditional family sedan and counts on the truck side of the sales ledger.

Mazda Canada Inc., for example, also has a 50-50 passenger car to truck ratio. Nissan Canada Inc. and Toyota Canada Inc. stood at 60-per-cent and 62-per-cent truck, respectively, through the first three months of 2018.

Fiat Chrysler Canada and Ford Motor Co. of Canada Ltd. are participating heavily in the truck-side boom at 96-per-cent and 89-per-cent trucks, respectively, while General Motors of Canada Co. sits at 79-per-cent trucks.

To underline how the market has changed, Mr. Gardner points to the Accord, a mid-sized car – in the segment that has taken the biggest hit as drivers’ tastes have changed – that has been redesigned for the current model year.

“I can remember back in the nineties, we would sell 30,000 Accords a year,” he says in an interview at Honda’s head office in Markham, Ont. “Our targets are half that now.”

Accord is holding its own this year from the standpoint of market share. It’s down about 5 per cent, while overall sales in the segment have plunged more than 16 per cent.

Honda boasts the bestselling passenger car in the country for the past 20 years in the compact Civic. But that’s another segment that has eroded, while sales of full-sized pickup trucks and large SUVs soar. Honda does not make a full-sized pickup truck or SUVs built on a truck frame.

Still, Mr. Gardner has the CR-V crossover, which is one of the top-five-selling trucks in the country. Increases in sales of the CR-V and the Odyssey minivan helped push Honda’s overall sales up 4 per cent in the first three months of the year.

CR-V sales topped 50,000 last year and he wants to boost this number this year as well increase overall sales for the Honda brand to 180,000 from about 177,000 in 2017.

That target is based in part on his belief that the slide in passenger cars is approaching the bottom and, even at a touch less than 30 per cent, it’s still a decent market.

“If you talk absolute numbers, 30 per cent of a two-million market, that’s still a lot of people that are buying passenger cars,” Mr. Gardner says.

Honda has redesigned every vehicle line in its product portfolio in recent years, which means that “for the next few years we’re going to have to sell what we’ve got,” he says.

Although the signing of the Trans-Pacific Partnership trade agreement earlier this year will lead to the elimination of the 6.1-per-cent tariff on vehicles imported from Japan, he says he doesn’t see any vehicles in the Honda Motor Co. Ltd. lineup in Japan that he would like to add in Canada.

So the strategy to increase sales focuses on customer retention, improving service, making greater use of Honda’s in-house finance company and communicating more regularly with customers.

He says various customer surveys show Honda’s retention rates at around 50 per cent when people are asked the simple question of what car they traded in when they bought a new Honda.

Customers who finance their Honda or Acura vehicles through Honda Canada Finance are more likely to buy another one, he says, as are those who get their vehicles serviced at the company’s dealerships.

“We’re trying to create an approach where you just don’t sell them the car and, four or five years down the road, you give them a call and say ‘Hey, are you ready for a new one yet?’ ” he says. “There’s got to be a more engaged communication and interaction throughout the piece.”

Interact with The Globe