Honda Undertakes Business Restructuring by Selling Cars Online

Hona started selling cars online in the US. (photo: twitter @honda)

JAKARTA - Honda is restructuring its business as it aims to achieve its target of 100 percent sales of electric vehicles by 2040. The Japanese automaker announced that all Acura-branded EVs will be sold exclusively and online, starting with the ZDX SUV, which will be released next year.

Honda shook up its leadership roster and created a new division to handle sales, marketing and communications for its growing EV business. Now they are positioning luxury brands like Acura as the "leader" in their shift to EV, which includes enhanced software services and, most notably, e-commerce.

It all starts with the RDX and RDX Type S, which pre-sales start later this year, with customer deliveries expected in 2024.

"The Acura ZDX, a luxury SUV with much of the same style and theme presented as part of the last Precision concept car this year, will be the first model to be sold exclusively online," said Senior VP Honda Mamadou Diallo, who was recently promoted to oversees all sales of American Honda.

“What we see is giving clients [and] consumers the convenience to transact where they want to transact,” Diallo said, as quoted by The Verge. He noted that Honda's dealer network will remain part of the process.

The auto industry has been slow to adopt online sales, as traditional dealerships remain the most common entry point for buyers. Some automakers, such as Tesla, have eschewed dealer models in favor of direct-to-consumer sales, but not without stiff resistance from dealers, who have enshrined their lead in legislation in most states across the US.

"Whether that process starts in your living room, and then continues at the dealership, or starts at the dealership where someone wants to touch and feel the car on the showroom floor, you still have to enter that information," says Diallo.

Honda's EV strategy has so far been defined by its partnerships with other manufacturers. Both of the automaker's initial EVs, the Acura ZDX and Honda Prolog, will be built on General Motors' Ultium electric architecture thanks to a partnership with the Detroit-based automaker.

Meanwhile, Honda helped launch Sony's first vehicle brand, Afeela, which will first go on sale in North America in 2026.

Honda, which has been caught off guard by the rapidly increasing demand for EVs, has struggled to catch up with its European and North American rivals. Now they are betting not only on pure battery-electric vehicles but also on electric motorcycles, mopeds, scooters, electric vertical take-off and landing vehicles, and battery-swapping technology.

As such, Honda announced Tuesday January 24th that it would create a new division called Electrification Business Development Operations to consolidate all of these offerings. They will also shrink the number of regional operations from six to three: North America, China, and “Associated Regions.”

"In particular, Honda will seek to further accelerate its electrification business and create new value by leveraging its wide and expanding range of mobility products and services," the company said in a press release quoted by The Verge.