Honda sets out on multi-pronged India strategy

Japanese automobile giant Honda has planned a robust strategy for the India market, banking on various fronts including new products, localisation, and above all, increased capacity.

Talking to Deccan Herald at a recent offsite event of the company in Goa, Honda Cars India (HCIL) Senior Vice President (Marketing and Sales) Jnaneswar Sen said, “During FY2015-16, Honda Cars India was the fourth largest car manufacturer in India, having sold 1.92 lakh units. There is demand growing in the market, and we want to tap it. Hence, we have invested Rs 380 crore in our plant at Tapukara, Rajasthan, in order to expand the capacity.”

The company has two factories — at Greater Noida and Tapukara — with both having a total capacity of 2.4 lakh units between them. Last year, the company recorded around 84% of capacity utilisation. With the new investment at Tapukara, Honda will be adding an additional output of 3 lakh units at the facility.

Product push
Honda recently launched the BR-V in India, marking its presence in the compact SUV space, and the company claims to have received over 9,000 bookings for the car.

“We’ve been entering many new segments for the first time; in the last three years, we have forayed into the entry sedan (Amaze), MPV (Mobilio), and now C-SUV (BR-V) segments,” Sen said, hinting at interesting model launches in the years to come.

This year, the company would also be launching the Accord Hybrid, entering a highly nascent segment with very few players. Interestingly, Honda was the first company in India to launch a hybrid, when it unveiled the Civic Hybrid, years ago.

Meanwhile, Honda has invested Rs 8,300 crore in operations till date, which has also included R&D activities. “We have been involved in R&D activities in India for a while now, and localisation is a huge area where we are carrying out R&D,” Sen said, adding that the entire Honda stable in India is localised, and produced domestically.

The company is now preparing for market growth, with a big dealership offensive. Honda Cars India currently has 298 dealerships in India, and plans to take the number to 340 showrooms over the next 10 months.