Honda Cars India, which sells models like City and Amaze, said the sedan segment will continue to have a strong play in the Indian market in future. However, with the SUV segment growing at a phenomenal pace, the company is developing a new India-focused SUV.
While sedans accounted for 20% of the total passenger vehicle sales in India in 2016, their share dropped to 10% in 2021. On the contrary, the share of SUVs jumped from 18% in 2016 to 38% in 2021.
“In terms of model-wise sales, our volume models, Honda City and Honda Amaze, have been doing extremely well with a strong segment share of 47% and 18%, respectively, which makes Honda the most preferred brand in the sedan segment,” Yuichi Murata, director – marketing and sales, Honda Cars India, told FE.
“We firmly believe that sedans will continue to have a strong play in the Indian market in future. Having said that, market preferences have surely grown towards SUVs, which is currently driving the growth in the industry. We recognise this trend and are currently developing a brand new India-focused SUV,” he said.
Honda Cars India only has four models in its portfolio at present. Apart from City and Amaze, it sells Jazz and WR-V.
While the company sold 1,83,787 units in the domestic market in FY19, its sales dropped to 1,02,016 units in FY20 and 82,074 units in FY21. During April-February FY22, the company sold 79,020 units, logging a growth of 5.40% year-on-year.
The Covid-19 pandemic has adversely affected automobile sales in India since March 2020. Semiconductor shortage has played spoilsport in FY22.
Noting that the past three years have been the toughest business phase for the Indian auto industry, Murata said a structural slowdown even before the pandemic has affected all vehicle segments since FY19.
“This period also saw several regulation changes, including BS6 implementation, which resulted in market shrinkage during the transition and also rationalising of the model line-up by almost all players in the industry. The post-Covid recovery was impacted by global supply-side shortages, including semiconductors, which continue to impact the availability of cars and increasing waiting periods for customers for most models,” he said.
Honda Cars India had stopped production at its plant in Greater Noida, Uttar Pradesh, in December 2020, discontinuing premium models like Civic and CR-V.
Murata said the company took tough but important decisions in its operations and business volume, focusing on strengthening its constitution and realising efficiencies which are sustainable and long term.
“Our priority during this time has been to become a solid, firm and flexible company, and our sales numbers reflect that approach and are as per our plan,” he said.
As part of its new export strategy from India in 2021, the company started dispatching the fifth-generation City to several left-hand-drive markets in West Asia and countries like Mexico and Turkey. It also exports Amaze, Jazz and WR-V. The overall exports of Honda Cars India have increased 321.71% year-on-year to 17,130 units from April to February FY22.
