Honda is the third-largest car maker in Japan but in India it is at a distant seventh, despite being in the market for nearly 17 years.
Its India subsidiary, Honda Cars India Ltd (HCIL), is readying a strategy, including a series of launches in the compact and premium segments, introduction of diesel variants and an increased thrust on exports, to fill the wide gaps in operations.
With an all-diesel line in India, it is desperate to bring the small capacity diesel engine it has developed independently, by the parent company. Starting next year, the company will begin introductions of diesel variants, to be first seen on a C segment sedan, based on its Brio compact car. Gradually the same engine will be seen in other models offered to the domestic market. However, none of the current generation models will get the engine, as an entirely new line is being readied. The City sedan will make way for a completely new, next-generation model, to be also offered in the diesel option. Though HCIL's overall sales have increased by 46 per cent to 35,440 units this financial year so far, sales of the City sedan dipped to 14,293 units, a drop of 28 per cent in the same period.
Further, the fastest growing passenger vehicle segment, utility vehicles, will also see some action.
The company is studying the possibility of introducing a utility vehicle in India, perhaps in the sports utility vehicle or the multi-utility vehicle segment.
Hironori Kanayama, president and chief executive, HCIL, said: "We have made significant changes to the new model line-up, which will be seen over the next year. We have decided on a number of new model launches...we have started investment on the diesel engine facility and it will be ready by the end of the year. We have invested in a completely new line."
He was speaking on the sidelines of the announcement of shipping the first batch of 390 Honda Brio cars from Mumbai Port to South Africa and Southern African Development Community countries.
The company, also the lead country for the Brio, will increasingly lay down greater focus on exports from India, as the country has met all required quality parameters of international standards. The emerging markets of Asia and Oceania will be served from India in the future.
The diesel on the Brio model will depend on the response for the diesel engine on the sedan from the local market. The company will decide on its introduction on the small car at a later stage. HCIL, however, clarified the Brio would remain the entry-level model for it in India and it did not plan to look at the segment where the newly launched Maruti Alto 800 sells.
Its six-model line in India has the Brio, Jazz, City, Civic, Accord and CR-V. This might be extended to 10 or more in the next couple of years, with increased sharing of platforms.
"The demand for UVs in India will increase. Therefore, we have not finalised but can study the segment in the future. Any model has to be locally optimised. Honda's global line up of UVs is one of our options. However, India is unique; therefore, like Brio, we have to develop a car which is good for the Indian market or for emerging markets," said Kanayama.
Honda has not ruled out its own participation in the below-four metre segment, with the likes of the Mahindra Quanto, Ford Eco Sport, Tata Indigo eCS and Maruti Dzire. The space enjoys reduced excise duty charges, enticing companies to develop new products, including sedans, SUVs and hatchbacks.