Honda Reaping Benefits of Getting Serious in India
Honda spent its first 17 years in India in the backwaters of the market but became more responsive, and began its rise, after ending its 12-year-old joint venture with a local manufacturer in 2012.
MUMBAI – Honda India has shown impressive growth in an Indian light-vehicles market that declined 3% over the past two years.
Honda sales last year totaled 179,816 units, a 67% spike from 2013, when deliveries jumped 47% from the prior year, WardsAuto data shows.
Honda spent its previous 17 years in India in the backwaters of the market, producing a few premium models but offering neither the small car nor diesel engine for which demand was increasing. Honda became more responsive to the market, and began its rise, after ending its 12-year-old joint venture with a local firm in 2012. It now has 206 dealers in 133 cities.
Presently Honda offers just five models, but three of them are driving the automaker’s growth:
The Amaze compact sedan, built on the Brio platform and introduced in 2013. Engineered for Indian traffic, it is less than 13 ft. (4 m) long but offers a spacious cabin, a responsive engine and an efficient diesel option.
The versatile Mobilio, an MPV with the appeal of an upmarket family car. It is available with a 1.5L diesel with highway fuel economy of 57.4 mpg (4.1 L/100 km) or gasoline engine (40.6 mpg [5.8 L/100 km])
The new, fourth-generation City midsize sedan is comfortable, efficient and responsive, with a 1.5L gasoline or diesel engine. Prices range from Rs800,000 ($12,700) to Rs1.4 million ($22,200).
More vehicles are on the horizon including a new Jazz, Honda’s first hatchback. Customers can choose between a choice of a 1.2L i-VTEC gasoline engine and a 1.5L i-DTEC diesel, with the possibility a 1.5L i-VTEC gasoline mill will be offered as well.
This may be followed by a new SUV based on the existing Brio platform and an Accord hybrid. Honda displayed two concepts, a high-performance sports car codenamed NSX and a CUV codenamed Vision XS-1, at the 2014 Delhi auto show.
Besides growing its product lineup, Honda is expanding local production.
Honda has invested Rs12.3 billion ($195 million) in state-of-the-art plants in Noida in Haryana state and Tapukara in Rajasthan state with combined annual capacity of 240,000 units. Further investment of Rs3.9 billion ($62 million) at the two factories is planned.
The automaker is spending Rs10 billion ($159 million) to develop a third plant, in Gujarat state, with an initial capacity of 100,000 units. Investment may reach Rs40 billion ($635 million) as capacity is increased in the future.
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