New Delhi, Sep 18 (PTI) Japanese auto major Honda expects its India business to return to a growth path as it prepares to re-enter the top-selling sport utility vehicle segment in India. next year, according to a senior company official.
The company, which has a presence through a wholly-owned subsidiary in the country, does not currently have a presence in the sport utility vehicle (SUV) space, which has now become the largest segment of the domestic passenger vehicle industry over 30 lakh per year.
In recent years, the automaker has discontinued models such as CR-V, BR-V and Mobilio in the market and now relies on its sedan portfolio – City, City eHEV (hybrid) and the compact Amaze sedan. to attract volumes.
In an interaction with PTI, Honda Cars India President and CEO Takuya Tsumura said the company has taken several steps over the past few years to make its corporate constitution “sound” again.
He admitted that the company had been through a difficult period over the past three years as globally Honda decided to switch to electric mobility and the process led to the restructuring of facilities and operations to conform to the new era.
Tsumura noted that the restructuring process has led to various actions, including the closure of a few manufacturing sites around the world, including a plant in India as well.
“We have done some restructuring over the past few years and it was a bit of a tough time, but now I can say it’s done, the business now has a sound constitution,” he said.
Calling India one of the most important markets, Tsumura said the Japanese company has now launched various initiatives such as introducing products in the high-selling SUV segment to increase its volumes in the country.
“I can say that we hit rock bottom this year and from now on we will only go up,” he noted.
Honda saw its market share in the domestic passenger vehicle segment decline from 5.44% in FY2019 to 2.79% in FY22.
Acknowledging that the lack of products in the top-selling SUV segment has led to lower volumes and market share, Tsumura said the company is now preparing to drive an SUV model next year to boost sales.
“The SUV market has seen robust growth and now accounts for approximately 50% of the overall passenger vehicle segment. We do not participate in this segment. We are confident that with the launch of the SUV next year, we will increase volumes,” he said. said.
When asked how the company plans to position the next model in a highly competitive segment, Tsumura said, “We’re confident about this model…well, it would be tough to be number one, but there will still be some demand there, so we want to attack that area.” He did not divulge details on the size and engine specs of the upcoming SUV.
Asked about the sales aspirations of the new model and how it could help the company regain its overall market share, he said the first objective was to improve the utilization of production capacity at its plant based in Rajasthan, which currently hovers around 60%.
The model’s development phase is nearly complete, and the company is now making some final adjustments before mass production begins, Tsumura said.
Dispelling apprehensions of exiting the market, he noted that the automaker is here to stay in the Indian market.
“We are staying. Why are we leaving a market that is now the fourth largest market in the world? We have been here for over 20 years, so there is no reason to leave,” Tsumura said.
India is one of the biggest markets in the world and Honda management understands its importance, he added.
On new product launches, Tsumura said the company is considering various segments with the electrification strategy in mind.
The company, which currently relies on hybrid technology, may offer battery-electric products in the future when the proper charging infrastructure is in place across the country, he added.
Honda plans to launch 30 electric vehicle models globally by 2030, with an annual production volume of more than 20 lakh.
As part of its corporate restructuring, Honda has decided to discontinue its three models – Jazz, WR-V and fourth-generation City – in India by the end of this fiscal year.
As of December 2020, the company had halted Civic and CR-V production with the closure of its Greater Noida plant to consolidate production operations at its second plant at Tapukara in Rajasthan.
The automaker had noted that the decision was made to realign its manufacturing operations in a bid to improve business efficiency. PTI MSS DRR