Honda’s 10-Passenger CR-V: A Unique Move to Meet Tax Requirements

The second-generation Honda CR-V may not have been considered a large SUV, especially by today’s standards or even those of the early 2000s, with most Americans likely viewing it as a “five-seater at best.” However, Honda of the Philippines saw an opportunity where others did not. From 2002 to 2005, they cleverly adapted the CR-V design to accommodate ten passengers, successfully navigating regulatory loopholes that allowed for increased sales until the approach eventually faltered.

While not widely recognized in Western markets, the 10-passenger CR-V AUV is familiar to consumers in its native market. AUV stands for “Asian Utility Vehicle,” a specific class of commercial vehicle in the Philippines characterized by multipurpose vehicles built on truck chassis, like the Toyota Tamaraw and Mitsubishi Adventure. These vehicles were known for their capacity to transport large groups across various terrains. A significant advantage for Honda’s entry into this market was that AUVs were exempt from the excise tax imposed on standard automobiles.

For those interested in more specifics, AutoIndustriya provides an insightful analysis that elaborates on the story behind the 10-seat Honda CR-V. The significant point to note is that the AUV label allowed for a reduction of around 240,000 Philippine pesos from the CR-V’s price. Using current exchange rates, that equates to approximately $3,500 to $4,000 less—considerable savings in a market where cars typically cost under $20,000. This pricing strategy led to favorable consumer responses; according to AutoIndustriya, once the AUV model was introduced alongside the standard five-seater CR-V, it outsold its counterpart by a factor of four. By 2003, Honda’s total CR-V sales reached 9,664 units, with only about 100 being non-AUV models.

How did Honda achieve such a feat, fitting ten seats in a vehicle that is nearly 20 inches shorter and 8 inches narrower than a Kia Telluride? Legroom was relatively straightforward as the AUV regulations required 60 cm (1.97 ft) of length per passenger, and Honda managed to meet this requirement with the additional row of seats. Width presented a bigger challenge; the CR-V’s middle bench measured 140 cm (4.59 ft) wide, and regulations mandated 35 cm (13.78 in) for each occupant. Interestingly, dividing 140 by four results in exactly 35—a solution that enabled four-abreast seating in the CR-V.

In total, the seating arrangement consisted of three passengers in the front, four in the middle, and three in the rear. A video embedded below provides an interior tour of the AUV, complete with a demonstration of the foldable third row.

In addition to accommodating more passengers, Honda had to boost the use of local materials and manufacturing processes to qualify the CR-V for AUV classification. Reports suggest that the overall quality was compromised, with the last row of seats lacking seatbelts and being removable as noted in a PhilStar review at the time of launch. Remarkably, some CR-V owners outside the Philippines eventually managed to import a third row. Despite the changes, the CR-V AUV maintained the same 148-horsepower K20A4 engine found in all second-generation CR-Vs in Southeast Asia, and these 10-passenger variants were exclusively front-wheel drive.

The attractive pricing of the CR-V AUV made it a desirable option, even if it couldn’t match the capabilities of truck-based AUVs. Many were reported to have replaced the front bench seat with captain’s chairs, effectively getting the best of both worlds. Honda’s innovative shift of adapting its smallest SUV into an AUV not only led to tax savings for customers but also prompted rival automakers to explore similar strategies. However, in 2004, the government ended the preferential treatment for AUVs, imposing the same taxes on them as passenger cars, which predictably caused AUV sales to plummet—a 25% decline was recorded in the first year without tax exemptions. This decision also adversely affected domestic manufacturing, as AUVs had local production requisites that standard passenger vehicles did not. When the third-generation CR-V debuted in 2006, the 10-passenger variant was no longer available.

Despite its oddity, the CR-V AUV represented more than just a unique offering. It marked a significant success for Honda Philippines, adapting a global vehicle to meet the unique demands and regulatory conditions of a targeted market. This achievement is what every regional division of an automaker aspires to; although it might have been a snug fit for all 10 potential passengers, it ultimately satisfied consumer demand.