In a direct blow to media business, some corporates are discontinuing their annual contracts with their PR companies.
Honda is the latest international company that has suspended their contractual obligations with their PR company U-Communicate.
Honda Middle East said it discontinued the services of U-Communicate, its public relations and events management company so as to be able to avoid any redundancies amongst their own staff.
Honda conveyed it in a formal communication to media houses informing them that it will communicate directly through its in-house communications team.
The letter stated that despite being pleased with the services of their agency over the past two years, Honda would like to minimise costs and thus it has decided to communicate directly. In future, the letter added, "we might use the services of U-Communicate when need arises."
Arijit Basu, Assistant General Manager, Honda, said: "We have been very keen on avoiding making any people redundant, yet we still have to shed costs, and therefore we have decided to carry out our media activities through our in-house team."
He said the team is well-trained, well-informed about the brand and is capable of responding immediately to all communications needs of Honda. "Throughout our relationship with our agency we have learnt a lot and are now capable of operating the communications department."
The decision involves all GCC markets. Basu said the motor company had no major events that required agency support, so there was no point in bearing additional costs.
Honda Middle East, according to Basu, will only have a few major launches this year, with new niche models mainly targeting the higher end. "This year is a consolidation year. Our focus will be more customer-oriented, as we plan to increase service absorption and enhance further build our customer relations."