In order to restart its business in India, Japanese automaker Honda aims to introduce at least one new model there each year with a focus on premium goods. The business unveiled an improved version of its mid-size sedan, the City, and intends to concentrate on selling petrol and hybrid vehicles with price tags exceeding Rs 10 lakh.
The business, which has a wholly-owned subsidiary operating in India, intends to phase out diesel models there.Honda Cars India President and CEO Takuya Tsumura stated during a press conference that the business would concentrate on the Rs 10 lakh and above sector over the following several years.
"In the passenger vehicle segment more than 40 per cent sales are coming from models priced over Rs 10 lakh. We expect this to grow more. Our focus would be on model introductions in over Rs 10 lakh segment," he noted.
Tsumura claimed that the top trims currently account for more than 60% of sales for Honda models like the Amaze and City. He stated that the new models would include both completely new models and model revisions of the current product line. As part of its aim to concentrate on high-end products in the nation, the corporation also intends to import models. With a Rs 260 crore investment, Honda has already started to overhaul its nationwide sales network. So far, investments of Rs 100 crore have been made in this.
In the domestic passenger vehicle market, Honda's market share has decreased from 5.44 percent in FY19 to 2.79 percent in FY22. The carmaker currently relies on its sedan lineup, including the City and the compact sedan Amaze, to drive sales after discontinuing models like the CR-V, BR-V, and Mobilio in recent years. Tsumura stated that the corporation has defined a global plan to focus on electric and hydrogen powered models moving forward while speaking about the company's strategy regarding powertrains.
"India is also part of the plan but every market is different depending on infrastructure," he noted.
Tsumura declared that the firm would stop producing diesel automobiles in the nation, in line with current trends around the world. He pointed out that the company's production schedule is still being affected by the chip scarcity to some extent.
"Some impact is there but Honda has prioritised for India so we are good for the first half of the year," Tsumura said.
According to him, the new models, especially the new sports utility vehicle later this year, are likely to enhance capacity utilisation at the company's Tapukara (Rajasthan) facility, which is now producing 1.2–1.3 lakh units annually.
The installed production capacity at the manufacturing facility is 1.8 lakh units annually. It can be increased further to produce about 2.2 lakh units yearly.
Tsumura claimed that the business has turned a profit over the last two years by cutting costs in various ways and is now seeking for expansion in the nation.On projected sales growth for the upcoming fiscal year, Tsumura stated that the company anticipates growing sales with the introduction of the new SUV model.
In response to a question on exports, he stated that the business has so far exported about 23,000 units this fiscal year and anticipates an increase in the following year. With 1.5 litre petrol models priced between Rs. 11.49 and Rs. 15.97 lakh, Honda debuted the updated version of the City (ex-showroom Delhi). Prices for the powerful hybrid trims (eHEV) range between Rs 18.89 lakh and Rs 20.39 lakh.
"India as the lead market for the model, we are excited to introduce the new City with sportier new look and enhanced new features for advanced safety, connectivity and convenience," Tsumura said.
As per him, Honda's global aim is to promote safe, environmentally friendly, and fuel-efficient vehicles that fit the shifting needs and preferences of today's consumers. This includes expanding the application of Honda Sensing in petrol trims and introducing new grades for e:HEVs. Tsumura stated that going forward, the eHEV (strong hybrid) models are anticipated to account for 15% of City sales.