After being in loss for six years in a row, Honda Cars India booked a profit of Rs 362.7 crore in 2014-15, mainly on the back of a 61% jump in revenues at Rs 12,874.3 crore. In 2013-14, Honda had recorded a net loss of Rs 479.8 crore.
The last time Honda booked a profit was in 2007-08, when it recorded a net profit of Rs 235.9 crore, according to the company’s filings with the Registrar of Companies.
The growth for the Japanese car-maker came from improved sales with the company’s second manufacturing plant going on stream during the year as well as its foray in to the diesel segment in India. Honda Cars booked a growth of 40.7% in its volume of domestic sale of passenger vehicles, taking its market share to 7.26% in 2014-15 from 5.36% in the previous year. In the same period, the overall passenger vehicle industry saw a modest growth of 3.9% over the previous year.
The company enjoyed a market share of over 4% in the passenger vehicle market in India at the end of the year 2007-08. However, with the higher demand arising in the following years for diesel cars, Honda’s market share fell sharply to around 2% at the end of 2011-12.
The year also witnessed Honda’s entry into the multi-purpose vehicle segment in India with the launch of its mid-size stylish 7-seater Honda Mobilio. The Honda City which was launched in January 2014 also received good demand with over 1,00,000 sales in the 15 months by the end of March 2015.
“India emerged as the fourth largest market for Honda globally during 2014-15 and holds great potential for future growth as well,” the company’s directors report said.
The finance costs for the company also went up by 117% in 2014-15 to Rs 229.6 crore, while the overall expenses went up 47.6% with raw material costs going up by 47% to Rs 9,697.8 crore .
Honda Car India has also focussed on higher localisation for its mass-market models like City, Brio and Amaze, analysts said.
In 2014-15, Honda has further expanded its presence in the market with its relaunch of premium hatchback Jazz in July this year. The year 2016 is also expected to have the launches of the B-RV, a compact SUV based on an extended Brio platform as well as the new generation Civic and Accord.