India now key to Honda's global targets

For Japanese car manufacturer Honda, India is one of the most important markets globally. This is evident from Honda Cars India’s doubling of its capacity and readying a strong product line-up to take on the competition. This week’s launch of Amaze is a case in point. Hironori Kanayama, president and CEO of Honda Cars India, spoke with Yuga Chaudhari on company’s plans. Excerpts from the interview:

Amaze, your first diesel vehicle, is ready to roll on Indian roads. What next for Honda?
As you know, we had a difficult time due to the lack of a diesel model. We planned the development of the diesel model three years back. Therefore, it wasn’t fun for me personally to see the market for diesel growing and the market for petrol shrinking. But it was not my concern at all as we are coming up with a strong and competitive diesel model like the Amaze. Its launch is a landmark and will mark our counter-attack.

How does India figure in Honda’s global scheme of things?
India is a strategically important market for Honda globally because of its high potential. It has a huge number of population next only to China’s. And China has grown very fast, it has had rapid growth in the past, but there is a slowdown now. In the case of India, we have not yet reached that level. Therefore, we have more potential. In that sense, India is very important for Honda.

Honda’s global sales target for 2016 is 6 million vehicles. Currently, Honda sells about 4 million globally. The target is almost a 50% increase. I think India must play a very important role to achieve such a high global target. So, India’s operations will be the fastest-growing operations for Honda globally.

How would you expand your product portfolio in the coming years?
In the coming few years, we will come up with completely new products and a few model changes. We have planned diesel options for the existing models as well.

Multi-purpose vehicles (MPVs) and sports utility vehicles (SUVs) are in the Honda pipeline...
Yes, we are exploring every possibility. As you know, UVs and SUVs are growing very fast. I think such a trend will still go on. In the premium segment, we have the CRV. The compact SUV market is growing as well. Among Honda’s global models, we have premium SUVs bigger than the CRV, premium sedans above the Accord and a small Accord as well. Out of the Honda’s global portfolio, we will pick some products and launch them in India.

You had to discontinue the Jazz temporarily to accommodate the Amaze. What is your plan to bring back the Jazz into the market?
Honda is going to introduce the new Jazz this year in advanced markets like Japan. The new Jazz will be coming to India next year.

Do you see Honda having a presence in all car segments in India?
It won’t come internally. Globally, we don’t cover all the segments. For example, we don’t have a 1,000cc car. Our target is to increase the number of Honda loyalists. We have to keep growing our sales from here.

What are your plans for exports now that you are doubling capacity?
Honda’s policy is to produce where there is a market. That is one of the reasons why we have a production facility in India. We manufacture in major markets like the USA, Brazil, so on.

Therefore, we can export to countries where there is no production facility. Currently, we have started exports of the Brio to South Africa.

The Amaze is produced only in India and Thailand. At present, we don’t have any plans of exporting the Amaze. If there is a demand and production capacity, we may think about it. But I don’t think we have any room for exports at this moment.