Honda Motor Company’s President and CEO Takanobu Ito will be in Delhi for the Auto Expo beginning February 5, a clear indication of the Japanese company’s commitment to India.
He is also expected to make some big-ticket announcements, especially in the two-wheeler space, where Honda is eyeing the top slot in the country by 2016. Ito is likely to announce Honda Motorcycle and Scooter India’s intent to set up its fourth plant in Gujarat.
The company already has facilities in Haryana, Rajasthan and Karnataka with its total two-wheeler capacity expected to reach 4.6 million units by the end of March. The Gujarat plant could kick off with an initial capacity of 1.2 million units, taking its capacity to nearly 6 million units over the next 12-15 months.
India is already Honda’s second largest two-wheeler market in the world and could take over Indonesia by 2016. By that time, the company will hope to become the top player here too, ahead of its former ally, Hero MotoCorp, which is doing over six million units annually.
The 2012 Auto Expo saw Honda make some important announcements on its India intent, especially the target of 10 million bikes and scooters by 2020. After the Gujarat plant, the company is likely to set up at least two more facilities in the country.
As the global CEO, Ito would naturally be keen to see Honda emerge tops in the world’s most important two-wheeler market, where there are strong local players such as Hero and Bajaj Auto.
He has said the company must constantly improve its cost-competitiveness to take on rivals in the pricing game, while maintaining its strengths in quality and top-class technology.
In the car segment, Honda has made a strong comeback, thanks to the Amaze, and is now betting big on the new City launched recently. This year will see the Mobilio multipurpose vehicle make its India debut with the all-new Jazz scheduled to follow.
Till the Amaze came along, Honda had a rough time for a couple of years in India, largely due to the absence of a diesel option.
The Amaze took off with a bang and the new City, again with a diesel option, is expected to take the growth story to the next level.
The Mobilio will be part of a product segment that is gaining ground in India and Honda will look to the coming years with more hope and confidence.
Ito will, therefore, have reason to feel upbeat about India even though the auto sector here is seeing its worst slowdown in decades. He will also be comforted by the fact that Honda has tremendous brand equity both in the car and two-wheeler space. Not many companies can boast of this twin advantage.