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Mulling possibilities to meet small car demand in India: Honda

Tokyo :Japanese auto major Honda is ‘seriously’ considering possibilities of expanding its small car portfolio in India to meet the rising demand in the market, even as it works on enhancing vehicle development capability in its operations there.

The company, which has made India one of its global components export hubs, also sees ‘ample room’ of growth for export of cars from the country with increased competitiveness of finished vehicles produced there.

When asked about the company’s plans for small cars in India, Honda President and Chief Executive Officer Takahiro Hachigo said: “At Honda, we place priority on trying to listen to the needs, request from the customers from different regions. Therefore, if the region is showing strong demand for small cars we are always seriously considering possibilities.”

He further said: “This applies not only to India, but all of Asia, listening in to the demands for small cars. We are thinking of what kind of strategy we need to put in place for this category…”

Currently, Honda sells hatchback Brio in the compact cars segment and Jazz in premium hatchback category in India.
Asked about India’s role in development of future Honda products, Hachigo said “we are going to work on increasing the development capability in India”.

Honda globally wants to enhance its six regional operation systems and would like to see each region work on their own development, procurement, production and sales in their respective regions, he said.

“Therefore, we would like to enhance these functions in India also,” Hachigo said.

To a question regarding vision for Indian market and volume expectation by 2020, he said instead of trying to estimate the volume, Honda would rather focus on products.

“India is a big country with a large population and I believe that motorisation will grow even more significantly. Heading towards 2020, as I said, I believe the key will be how many products we can come up with, that the Indian customers will like,” he said.

Hachigo further added: “We believe that it is more important that what kind of products are going to be welcomed by Indian market. Therefore, we are seriously considering what types of products, and I think if we have such competent products in place that would determine the volume.”

Commenting on exports from India, he said: “Already India is a growing export hub for our components. We are exporting worldwide and also in small volume, we are already exporting cars from India to, for example, South Africa and other Asian nations.”

Asked about the timeframe to achieve such target, he said: “We cannot say specifically which car by when because we have not yet fixed the details, but we think those cars that are competitive in India are also going to be competitive in other countries. So we want to try to export small sized cars from India first.”

The company’s Indian arm, Honda Cars India Ltd, exported 8,403 units last fiscal, while in 2013-14 it had shipped out 5,798 units across various markets.

It exports models include hatchback Brio, compact sedan Amaze, mid-sized sedan City and multi-purpose vehicle Mobilio, and also its recently re-launched premium hatchback Jazz mostly to South Africa and neighbouring countries Nepal and Bangladesh.

The company, which exported auto components worth Rs 722 crore in 2014-15, had earlier said it is looking for over 50 per cent increase to Rs 1,100 crore in the ongoing fiscal by adding more countries such as the US, China and Canada to its basket.

Honda’s exports of auto components from India have been gradually increasing. In 2013-14, its component exports had a turnover of Rs 420 crore.

It ships different engine parts, forgings and transmissions along with others, which are produced at its Tapukara plant in Rajasthan to a host of global operations. These include Japan, Thailand, Malaysia, Indonesia, Philippines, Taiwan, Vietnam, UK, Brazil and Mexico.

Soon, it will start exporting components to its operations in US, China and Canada.