With the National Green Tribunal (NGT) order making car dealers nervous, automakers are trying to come up with alternative strategies to clear the inventory backlog. Speaking to Bloomberg TV India, Jnaneswar Sen, Senior VP - Sales & Marketing at Honda Cars India, says the company will find ways to move diesel cars stuck with dealers in Delhi to dealers in other States.
SIAM’s monthly numbers were released a few days back. Passenger vehicle sales have been tepid. After a good festival season, they have now slumped 8-11 per cent. Where will the trend move from here, and will FY16 be a good year?
After the festival season is over, the market does traditionally slow down a bit.
So nothing new has happened in the trend — it has slowed down this year as well. I wouldn’t say that the industry is on a very solid growth path.
Yes, the industry has grown for many months now, but it has primarily been driven by new product launches, including our Honda Jazz.
At the same time, there are many factors which are making things tough for the industry as well. But, going forward, we do hope that sometime next year, the industry should turn the corner. That would be a good tail wind for the industry.
You just had a recall for 90,000 odd cars. Can you tell us more on that?
We have recently recalled the Diesel City and Diesel Mobilio. We have been doing recalls for many years now. We have always done them proactively, and that reinforces the faith our customers have in us. Many people say recalls have an adverse impact. I would say that if you do it proactively in the interest of the customer, it helps build the brand. Ideally of course it’s not like we should look forward to recalls — or have any. But cars have become so complex now that sometimes recalls are required.
What growth trajectory do you expect, and what product launches do you have planned for the near future?
After three years of robust growth, this fiscal too — from April to November — we are growing 13 per cent. The other exciting news from Honda is that if you take calendar year 2015, we will cross 2 lakh cars in sales by December 31. Next year, we have two big launches lined up. One is an exciting cross-over utility vehicle called BRV. It’s a premium product that will be a seven-seater. Then we shall also be launching our flagship, the new Accord, in 2016.
Moving to the matter of diesel car emissions in Delhi. A lot of companies have stocks lying with dealers. What will Honda do for its dealers? Will you recall some of the vehicles, or compensate your Delhi dealers?
This has taken everybody by surprise. What I understand is that all Delhi dealers — of all manufacturers put together — have stock which is in excess of ₹1,000 crore. So that’s a huge amount. We are eagerly waiting for the outcome of this appeal — which has been made by the Delhi dealers — to the NGT. We are hoping for the best. However, if there is no relief then we will have to see. We may have to move the cars out of Delhi and we will have to see find new markets for them. That too will involve additional transportation of the cars to other places which will lead to some pollution by itself. In addition to that, the tax regime for such changes is complicated, and we will have to see how to manage inter-State sales of cars which are already with dealers. They have already been sold by the manufacturer to the dealer. So, the methods to sell from one dealer to another dealer in some other State will have to be studied.
Since the next main hearing is on January 6, will that lead to a hit on diesel car demand in the interim for the Delhi market? Consequently, will the surrounding regions see a jump in demand since people could go and register their vehicles there?
Whether petrol or diesel, we have emission norms in this country — the Bharat Stage IV norms. Any fuel type meets that norm. As far as the demand is concerned, Delhi has not been a very strong diesel market ever. But there could still be a possibility that the demand shifts because lot of people have houses in Gurgaon and work in Delhi. So they can easily buy a diesel car and register it in Gurgaon, and still drive it in Delhi. So, essentially what we need is a very very comprehensive strategy to fight pollution. These individual actions which come out of the blue virtually may not help the sector.
Is Honda ready for BS-V & BS-VI implementation?
We will follow the regulations with no problem.