Honda Cars expects higher growth than automotive sector this fiscal
Hyderabad: After a 18 percent drop in sales volume in 2016-17, Honda India saw growth of more than 38 percent in April and expects to do “a little” better than expected growth rate 7-8 per Cent of the automotive sector during the current fiscal year.
Yoichiro Ueno, President and CEO of Honda India, told reporters on Friday that the company started the new year on a positive note, total sales increased 9% between January and April 2017, compared to the same period last year . The company is expected to show steady growth in the coming months.
However, like other car races Honda keeps its fingers on the impact that the tax on goods and services (GST) will have on its sales and the overall market in 2017-18.
Honda, the fourth largest passenger car manufacturer in India, posted a 38.1% growth in April, which is the highest for the month.
Ueno said the new models, New City and Honda WR-V, contributed significantly to this growth in sales. It has received more than 30,000 reservations for Honda since its launch in mid-February and 16,000 reservations for WR-V since its launch in mid-March.
Honda sold 1,57,313 vehicles in 2016-17, down 18 percent. Finally last year, a difficult and challenging year, Ueno attributed the drop in sales to a combination of factors including high levels of inventories earlier this year, a shift in customer preference for fuel and demonetization.
Despite the challenges, the passenger car market in the country increased by 9.2 percent. India was the fifth largest market in the world, behind Germany.
The CEO of Honda estimates that if the current trend of growth continues, India will surpass Germany to become the fourth largest market in the current year. He said India had the potential to outperform Japan in five years to become the third largest market after China and the United States.
Indicating that India will witness a real engine like China between 2020-2030, Ueno said Honda would strengthen the brand and focus on the product and enhance the customer experience.
He said that while maintaining its position as a premium brand, Honda also tried to have a presence in entry level cars with reasonable prices.
Ueno said Honda had received a lot of questions as to when it would introduce its top brands such as HR-V and Civic in India. “HR-V is one of the options for the Indian market, but we are evaluating,” he said, adding that the SUV could be “a little expensive.”
The company has two production facilities in India and Tapukara Gran Noida in Rajasthan. It has made accumulated investments of Rs.8.6 billion in the two plants, which together have an installed capacity of 3 lakh units per year and employ 9,800 people.
Both manufacturing facilities are currently operating at a rate of 2.40 lakh units annually. The Rajasthan plant also manufactures components for Honda’s global operations. High quality components are exported to 15 countries. The export turnover in 2016-17 was 1,140 crore. He said that it has increased by 157 percent in the last three years.
Anita Sharma, Assistant Vice President, Marketing, Honda Cars, said she acquired land in Gujarat for her third plant. He said that this plant would be part of his long-term plan.
Honda Cars has a dealer network in presence of 345 facilities in 230 cities in India. It plans to add 29 new dealers and introduce 22 new cities in the current fiscal year.
Honda, the eighth-largest automaker in the world, has 137 factories in 41 countries.