Premium car maker Honda Cars said on Wednesday that it is not leaving India and is here for a long-term commitment with a new model launch every year, starting this year with the new sports utility vehicle (SUV).
The company added that it has been profitable in the last two years, amidst pandemic and semiconductor shortage, and is on track to invest ₹260 crore, of which it has already spent ₹100 crore on revamping its dealer network and marketing campaigns.
“For Honda cars, the US, China, and Japan are the three biggest markets, but others like Indonesia, Thailand, Canada, and India are the next big markets. India is an important and promising market for future growth compared to the other big markets. The results of the last two years in terms of sales and business side are proving we are returning to better times, and that is why we are getting certain line-ups for the future,” Takuya Tsumura, President and Chief Executive Officer, Honda Cars India (HCIL), told businessline on the sidelines of the new City launch.
New SUV
The company plans to launch the new SUV by the middle of this year, for which it has started pre-production at Honda’s Tapukara (Rajasthan) plant. HCIL has an installed manufacturing capacity of around 1.8 lakh units per annum, which can be ramped up to around 2.2 lakh units in the future. Currently, the company is producing 1.20–30 lakh vehicles per annum, including for exports.
“We are ramping up our production capacity to 600-620 units a day from 540 units a day right now,” Tsumura said.
In recent years, the Japanese automaker has discontinued models like the Civic, CR-V, BR-V, and Mobilio from the market and now relies on its sedan portfolio—the City and compact sedan Amaze—to bring in the volumes.
Tsumura said that models like the Amaze and City’s top trims currently contribute over 60 per cent of the sales, adding that the company expects 15 per cent of the City sales to accrue from the eHEV (strong hybrid) variants in the near future.
Going forward, the company said it will also import its global products as completely built units (CBUs) or in semi-knocked down (SKD) form as the Indian market for premium cars is growing, even though there are higher import and custom duties on such vehicles.
“If we have CBUs, our target customers should be of luxury or premium cars, so there won’t be much impact... of course, lower tax is always better for a customer. CBU models are part of our plan, but we have not decided on any time line,” Yuichi Murata, Director - Marketing and Sales, HCIL, said.
All new City launched
HCIL launched the new City (Petrol) and City e:HEV, priced between ₹11.49 lakh and ₹20.39 lakh. While the petrol variant of the sedan is priced at ₹11.49 lakh to ₹15.97 lakh, the e:HEV is priced at ₹18.89 lakh to ₹20.39 lakh (all ex-showroom prices, New Delhi).
On competition from other companies like Hyundai (Verna), Skoda Slavia, and Volkswagen Virtus, Kunal Behl, Vice President Marketing & Sales, HCIL, said that more products in the segment will draw more customers to Honda’s showrooms too, to compare the differences.
“City has two strong unique propositions—one is that it has the hybrid, which gives a high mileage of 27.13 kmpl and it also offers the Honda Sensing feature (ADAS), which is unique in a sedan and makes one of the safest cars in the segment. We have added two more features: low-speed follow up and lead car departure notification. That gives us confidence that the City will remain a true market leader in mid-size sedans,” he added.