MUMBAI – Honda Siel Cars is reshuffling management in a bid to regain ground lost in India.
Hironori Kanayama, chief of the auto maker’s Taiwan office, replaces Managing Director and President Takashi Nagai in April. Marketing chief Seki Inaba also is being recalled.
According to WardsAuto data, Honda India sold 47,548 cars in 2011 for a meager market share of 1.6%. This January, its share dropped to 0.6% on just 1,784 deliveries.
In comparison, the auto maker commanded 3.5% of the market in 2007 with more than 60,000 sales, led by the Honda City premium sedan – a segment it pioneered in India.
The downhill slide was checked briefly in 2010, when Honda entered the hatchback segment with the Jazz (Fit). The Brio premium compact held out further promise in 2011, as the auto maker strove to match consumer preferences.
But natural disasters in Japan and Thailand broke down Honda’s supply line, and financial losses mounted correspondingly. Rising gasoline prices are shifting market demand toward
diesel cars, but Honda does not yet field a diesel engine in the Indian market.
In Japan, Honda is testing a diesel Brio hatchback with a newly developed 1.2L common-rail i-DTEC engine. Yasuhisa Arai, chief of research and development, reportedly says the auto maker is accelerating plans to produce the diesel engine.
With the supply line from Japan restored, and the use of China-sourced parts in place of its damaged Thailand facilities, Honda India has resumed production at its Noida plant. There are long waiting lists for the auto maker’s small cars, but presently it is able to produce only Civic and Accord sedans.
To make the cars more affordable and to plug the supply-line gaps, Honda India has increased to 80% the local content of parts for the products sold in the country.
The auto maker also is shipping electronic components and underbody parts from its Rajasthan plant to its Southeast Asian and South American facilities so Honda City production can be maintained.
“Output will soon be aligned with the market demand,” says Jnaneswar Sen, vice president-marketing.
Honda India has raised prices by Rs10,000 to Rs25,000 ($200 to $500) as India’s fuel prices continue increasing. The auto maker had been planning for 10%-12% growth in the next fiscal year, but it is not yet clear whether it can realize those plans.
