Honda has great brand equity in the Indian market. It always did. That’s why it even enjoys a certain perception and desirability advantage over some of its direct rivals. Lately though, things haven't been moving in its favour like before and the competing brands have been catching up at an ever rapid pace.
I’ve had defending statements from many car makers upon discussing their products and strategies. Questioning a brand or a product for its attribute or positioning is extremely easy after its launch in the market and people might not give a focussed thought on the manufacturers’ effort and investment in building the car itself. Let me say this on behalf of all automotive journalists and analysts — we do. But it’s impossible to escape ground realities. It’s only after a manufacturer introduces a product in the market can anyone do a critical analysis on it — isn't so? Or else involve us in the strategy meetings, perhaps? But that wouldn't be.
Honda’s performance in India has been chiefly dependent on two models — Amaze, and City. That is despite the fact that it has a reasonably wide portfolio of products, most of which are in the mass segment. Here’s a look at Honda’s range of cars in India: Brio, Jazz, Amaze, Mobilio, BR-V, City, and CR-V. The luxury sedan play will be the responsibility of the Accord which is expected to be launched in the festive season later this year.
The sales of Brio make me saddest. It’s a genuinely pleasing car. Sure, the rear suspension could do with a more planted feel, but the delightfully high-revving engine, small size and a good gearbox make it a really happy puppy of a car. It’s got sufficient space inside as well.
So what went against the Brio that it has been a sales disaster for Honda? Sales are dependent on consumers’ reaction to a product when the company launches it.
The Brio has largely been targeted at the Maruti Swift and Hyundai Grand i10. Trouble is, Brio’s styling is borderline love-it-or-hate it and people didn't quite take to its eccentric looks very well. The shape and overall design execution also makes the Brio look smaller than its rivals. It also a curious looking thing and it’s completely fine by me. At least that gives it character. But, consumers’ perception goes a long way in determining the performance of any product. I’ve had people in my own circle of friends and family who didn't buy the Brio purely because “it looks strange”. That makes it a tough sell by default — especially when you’re going after established super performers like the Swift.
I always maintained that it’d have been better if Honda would’ve pitched the Brio against the Hyundai i10 or the Wagon R. You need to think about this. The Swift had a diesel engine making a strong case for it, and the Grand i10, too, came with a diesel motor. And while the petrol engines made for almost 50% of sales, there was still a great market for diesels in this segment. The Brio has never had a diesel engine, and, combined with the perception issues that I mentioned in the previous paragraph, it never really had much in its favour. So, battling in the petrol-only segment where it would’ve looked fittingly close to its rivals might have given it a better, fighting chance of playing the numbers game perhaps.
The MPV segment in India isn't much evolved. It’s only the Toyota Innova that does respectable numbers, and to some extent Maruti gets a few Ertigas on the road (Maruti brand name and network definitely helps). The Mobilio was never really meant to be a market success in a country where MPVs have never done well.
The compact SUV segment is rapidly growing and has the potential to change the performance dynamic and shift the needle in the green for any manufacturer. That’s why every OEM that isn't in this space is taking the plunge and working overtime to develop one.
Honda is pitching the BR-V as a compact SUV. Sorry, but its resemblance to the Mobilio is its Achilles heel. It’s quite a decent drive. But it looks very MPV-ish. In fact, the revised strong and chromed front-end feels inconsistent with the overall design. It also lacks a couple of crucial features.
Additionally, I’ve been reading many comments from digital content consumers across the media sources that people would’ve preferred a 5-seater ‘proper’ crossover rather than a better looking 7-seater that the company already has. Apparently, in the compact SUV segment, 7-seater configuration isn't absorbed very well. That’s why the XUV500 does fine in that category — it has the quintessential ‘SUV’ presence and the traditionally established concept of a proper big, beefy 7 seater. It’s not a compact SUV — it’s simply an SUV. The BR-V is also priced a bit on the higher end. I personally feel it should’ve been priced roughly about Rs 80,000 lower across the variants.
The need was for Honda to introduce the HR-V in India. It has a lovely form to it — looks upmarket and has enough ammunition in perceptive value and product features to lock horns against the Hyundai Creta. The car might be an expensive proposition currently (I hear you Honda), but if reasonably high localisation level can be achieved, there will be enough sales opportunity and scale for numbers to tilt the game in Honda’s favour. It would be an absolutely cracking rival to the likes of Hyundai Creta and Renault Duster, and might even shift customers from the XUV500 in the urban centres. It’ll also do something far greater — enhance the brand image of Honda which has taken a bit of a hit of late. People have been telling me that Honda might want to launch the HR-V against the Hyundai Tucson in the 15-20 lakh bracket, but in my personal view, that might go the wrong way. Honda needs a crossover in the 10-15 lakh bracket, and it has one now, but it’s not the one it should’ve ideally launched.