‘India is a growth story’: Japanese auto giant Honda to launch one car in country every year

Honda Cars India Ltd CEO Takuya Tsumura says company has made efforts to communicate its plans for India market to consumers amid rumours about it shutting down business in country.

Takuya Tsumura, president and CEO, Honda Cars India Ltd | By special arrangement

New Delhi: Buoyed by its operations in India turning profitable last year, Japanese auto giant Honda Motors has announced its plans to launch at least one new car every year in the premium segment (priced over Rs 10 lakh) in the country.

The company reiterated that it does not make sense for it to exit the India market.

“…Business situation was a little bit bad in the last 2-3 years but from last year we turned back to black ink and this year (2022-23) too we will be profitable. So, Honda is in a much healthier situation in India,” Takuya Tsumura, president and CEO, Honda Cars India Ltd, said during a roundtable discussion with the media Thursday.

Tsumura, who took over Honda Cars India operations last April, said he’d noted rumours and social media comments on Honda Cars India shutting down business. The company has made efforts to communicate its plans for the India market to consumers, he added.

Further, in line with the company’s global direction, it will no longer manufacture and sell diesel vehicles in the country.

Kunal Behl, vice-president, marketing and sales, for Honda Cars India, said some tough decisions, including resizing and restructuring operations, were taken to reduce fixed cost and increase operational efficiencies. He noted that the company is investing Rs 260 crore in revamping and upgrading dealerships across the country.

“We are launching the new SUV (sport utility vehicle) in mid 2023… we plan to launch at least one new car every year…So overall things are getting much stronger. It is a strong message to customers that India is a very important market for Honda Cars India. India is a growth story… It is the third largest player in the world. It makes no sense to exit this market,” Behl added.

On Thursday, Honda Cars launched two new cars in the Indian market — New City (petrol) priced in the range of Rs 11.49 lakh-Rs 15.97 lakh, and New City e:HEV, starting at Rs 18.89 lakh.

The New City (petrol) comes with a 1.5L i-VTEC DOHC engine with Variable Timing Control (VTC) and delivers fuel efficiency of 17.8 kmpl for 6-speed Manual Transmission and 18.4 kmpl for 7- speed CVT (continuously variable transmission) or the automatic transmission, according to the company. The City e:HEV, which harnesses any electrical energy through braking and self-charges the Lithium Ion battery pack, will deliver fuel efficiency of 27.13 km/l.

Honda expects growth in exports from India 

On the company’s focus on premium products, Tsumura said that more than 40 per cent of sales in the passenger vehicle segment are in the over Rs 10 lakh segment. “We expect this segment to grow more and will focus on this segment, and introduce products in this segment.”

He added that within Honda Cars India’s portfolio, 60 per cent of the sales of City and Amaze come from the topmost variant.

The company also expects exports from India to grow by more than 25 per cent in the coming fiscal. “Our exports this fiscal year are about 23,000 units, which is a 25 per cent growth from the previous year. We expect bigger growth this year in exports.”

Replying to a query on the semiconductor supply, he said, the company is still seeing some impact due to the semiconductor supply issue, “but within Honda we have a prioritisation for India”.

“We should be fine, but we don’t know till when the impact will continue,” Tsumura added.

(Edited by Geethalakshmi Ramanathan)