Honda Cars India is about to resume production of cars at both its Tapukara (Rajasthan) and Greater Noida (Uttar Pradesh) plants, and it has opened about 60% of its dealerships and is working on its supply chain network. “We are waiting for our supplier operations to stabilise,” says Rajesh Goel, senior vice-president & director of Sales & Marketing at Honda Cars India. In an interview with FE’s Vikram Chaudhary, he explains why Honda is planning to sell the current fourth-generation City sedan alongside the fifth-generation (which will be launched soon), and how Honda from Home, its digital sales channel, complements the dealership network. Excerpts:
How will the ‘Honda from Home’ digital sales channel change Honda dealerships?
While ‘Honda from Home’ makes the car-buying process more convenient for our customers, it is not an alternate sales channel; it actually compliments the dealership sales channel. The aim is to reduce the physical contact of the customer with the dealership.
But can it lead to dealerships getting restructured in terms of size and/or workforce?
It’s too early to say right now (in terms of size). At the same time, I don’t foresee job losses at dealerships due to a digital sales channel, for the simple reason that jobs are mapped to sales. On the contrary, the aim of ‘Honda from Home’ is to increase sales, and this increases the engagement of salespersons with prospective customers.
To what extent have you delayed the launch of the new, fifth-generation City sedan? How do you gauge the demand side?
The City launch is round the corner—due to the lockdown situation, we are working on its launch timelines to align it with production resumption, reopening of dealerships and also community normalcy. I also believe that when demand is weak, there are two things manufacturers can do to revive it. One, any kind of incentives or promotions can pull customers; two—and this is important—newness and freshness, which comes from new products, like the new City. It is the responsibility of every manufacturer to create excitement in the market, be it with new products or with any kind of offerings for customers. At the same time, we are waiting for our supplier operations to stabilise (a car is made up of hundreds of parts provided by different suppliers). Also, while our Tapukara plant in Rajasthan is in the ‘green zone’, some workforce lives across the border (in Haryana). We aim to soon reach a point where we are confident that we can restart operations in a stable fashion.
How many dealerships have you opened so far?
Of the 376 dealerships we have, about 200 are now open—i.e. 60% of our physical sales network is functional.
Why is Honda planning to sell the current fourth-generation City alongside the fifth-generation?
In the case of the City the model change has happened at a time when we were also transitioning from BS4 to BS6 emission levels. The current (fourth-generation) City was certified as BS6-compliant just after the festive season last year, so we have the ability to produce it in a BS6 avatar. Also, the City has been a greatly loved brand, and over the years we have had requests from customers about not discontinuing the older generation (whenever the model change takes place). This time, we decided to give it a try, and we will sell the fourth-generation model in parallel with the fifth-generation.
But there would be significant price differences between the two…
I cannot comment on prices right now, but by doing so we will be able to give a larger choice in terms of variants and price bands to the customer. Having said that, the City, for over 20 years, has been a desirable, premium brand, so there is no intention to start selling a stripped-down version. All variants will be loaded with features and luxury. I think the new (fifth-generation) City is going to be the largest sedan in its segment in India—it’s almost as big as the previous Civic sedan we sold here.
With the transition to BS6, what have been the changes to your model line-up?
During 2019-20, 80% of the cars were sold were petrol and 20% diesel, but this ratio varied across models. We’ve now decided to offer diesel models in specific segments.
The WR-V and the Amaze will be offered in both petrol and diesel.
The Jazz will be offered only in petrol.
The Civic already has a BS6-compliant petrol engine, and the BS6 diesel will be launched soon.
The CR-V will continue to be offered in a petrol model only.
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