Rajesh Goel has joined Honda Cars India Ltd (HCIL) at a time when sales of company cars have seen a sharp drop. In March 2018, HCIL registered monthly domestic sales of 13,574 units, a drop of 28.4% compared to 18,950 units sold in March 2017; in April, the drop was a sharper—about 36%. In FY18 overall, HCIL registered a growth of 8%—it sold 1,70,026 units in FY18 compared to 1,57,313 units in FY17. In the process, Tata Motors overtook HCIL to become India’s fourth-largest passenger vehicle (PV) company. Tough times, it would appear.
However, Goel, the new senior vice-president & director, Sales & Marketing, HCIL, believes that, in the automotive industry, monthly sales performance can peak or ebb depending on various factors, and adds that the new financial year brings new opportunities. “I won’t say Honda performed poorly. Over the last few months, the previous-generation Amaze was in a run-out phase, so we couldn’t add huge volumes to this ‘seller’ of a car. The current financial year offers tremendous growth opportunity for HCIL, as we have three big launches—the new Amaze this month, and the new CR-V and Civic later in the year—so we will come back. As far as increasing overall sales numbers is concerned, we have a game plan, and it starts with the new Amaze.”
He adds he would like to sell more. “If not two times more, then at least one-and-a-half times more. That’s both my wish and my target.” This week, HCIL started the production of the second-generation Amaze at its Tapukara plant in Rajasthan. “India is the first country where the new Amaze is being manufactured; it will be launched on May 16,” he says. “The Amaze will be a game-changer for HCIL, both in terms of boosting our business and strengthening our model line-up. Our R&D team has studied the compact sedan segment in great detail, and has developed a product that, I am sure, will amaze the Indian market once again.”
However, he doesn’t share expected sales targets. “We would like it to perform better than what the first-generation did.” For HCIL, while the WR-V crossover and City sedan are doing well—and the company expects the Amaze to sell even better—the sales of BR-V SUV and Brio hatchback are muted. “The Amaze shares its platform with other cars, including the Brio. We have the option of deciding how to use this platform for other cars, which may or may not include the Brio. Going forward, we would like to perform the best in all the segments we operate in.”
With the new Amaze, HCIL has some aggressive marketing plans, too. “We intend to go very strongly into tier-2 and tier-3 towns, expanding our presence by tapping those markets more significantly,” Goel says. However, this doesn’t imply expanding the number of dealerships. “We don’t have a plan, or the need, to expand our dealership network this year. We already have 353 dealer partners in 242 cities, covering almost the whole country. But we need to expand our presence in terms of ‘selling efforts’ through our existing dealer partners in tier-2 and tier-3 markets.”
India is the fourth-largest market for Honda Motor Company, after China, the US and Japan. “India is an extremely important market for Honda, primarily because we have a low penetration rate. So the potential in India is much higher as compared to many other markets. India already is Honda’s largest two-wheeler market. There is no reason why HCIL shouldn’t aim at achieving a similar kind of success in the PV business,” he says.
Goel was amongst the first few employees who joined HCIL in 1996 at the time of inception. In these 22 years, a major part of his career has been spent in purchasing and quality functions. From purchasing to sales is a sea change. He, however, believes that, in Honda, nobody is really new in any function. “In Honda, there is a lot of inter-function and inter-domain interaction, and reviews which happen both at model level and function level. So, there is a significant understanding and appreciation of each function to even people from different functions. In Honda, when you change functions, you don’t enter into a foreign territory,” he says.
The Amaze competes in a price-conscious segment. Honda has chosen to arm it with a CVT automatic gearbox (as an option), even though other players have taken the AMT route (a CVT gearbox is more expensive than an AMT). Won’t it affect sales? “R&D is core to whatever we do. Honda won’t bring ‘old’ technology to the market, irrespective of the development level of that country.
When you bring ‘new’ technology, you help mature both the customer’s mindset and the market. We believe, in the longer run, CVT is the way to go as far as automatic gearbox technology is concerned.” AMT, he says, is a compromise—at least as far as driving experience is concerned. “We won’t make a compromise in our vehicles.”