Japanese carmaker Honda?s strategy to introduce diesel models in the Indian market seems to be working. Honda Cars India has, within a very short span of unveiling its new diesel models, seen significant improvement in bottomline, though it is still in the red.
Riding on successful launches in FY14, Honda Cars India more than halved its net loss to Rs 479 crore against Rs 1,109.7 crore in the previous fiscal as per data published by Registrar of Companies. On an accumulated basis, loss for FY14 was Rs 1,848.6 crore compared with Rs 1,368.9 crore a year ago. During the period, Honda?s net sales went up 94.4% to Rs 8,828.7 crore against Rs 4,1541.6 crore a year ago.
Honda saw two key launches in FY14 ? the entry-level sedan Amaze and the new City ? that helped the carmaker nearly double its market-share from 3% in FY13 to 5.8% at the end of FY14.
“Honda’s new launches in FY14 significantly helped the company improve its topline,” said Pramod Amthe, auto analyst, CIMB.
“The issue here is not how soon will the company break even but the fact that Honda needs to sustain the growth momentum and build on it further. In addition, competition is only getting extensive, and they need to make at least some profit this fiscal as a build- on from last year’s launches and a successful foray into a new segment, the MPV Mobilio, this year,” he said.
?Your company managed to post its highest ever annual domestic sales of 134,339 units during the financial year 2013-14, registering overall y-o-y growth of 83%. The strong response from the market for the Honda Amaze and All New Honda City has been the driving force for this record achievement,? the company said in the RoC filing.
?With the launch of the Honda Amaze in April 2013, your company has started its journey in the diesel segment which has received an overwhelming response from the market,? it said.