Hybrids to SUVs: Honda bets on new launches to regain footprint in India

Japanese automotive (auto) major Honda is trying to recover lost ground through the launch of new products and entering new segments in India.

The company on Thursday launched a hybrid version of the popular sedan City as it attempts to make its mark in its transition to clean fuel.

“India is a very important market for us. We have a very strong brand image here and I want to carry that forward,” said Takuya Tsumura, new president and chief executive officer at Honda Cars India, who took charge on April 1.

As part of further organisational restructuring, the company has elevated Kunal Behl to vice-president- marketing and sales, from operating head-sales and network development.

Tsumura has experience in the India market, having served here from 1997 to 2000.

Globally, Honda last June announced plans to invest $40 billion to develop electric vehicles (EVs) over the next decade. The company will launch 30 EVs by 2030 and produce 2 million vehicles annually.

However, Tsumura said that the first phase of the clean mobility journey for Honda in India will be through hybrids.

“We need to observe the reaction from the market and competitors, and plan the future,” he said, adding that fuel efficiency for the hybrid variant is better by 40-45 per cent. “I think with fuel prices at a record high, this is a good time to launch the model,” he said.

While automakers like Tata Motors are bullish about transition to EV, Japanese automakers have been somewhat sceptical.

They feel there are hurdles in infrastructure, affordability, and range to make EVs profitable in India.

Honda is importing a few components for the hybrid system from Japan. “But the commitment of the brand towards India is high. For Indian customers, it is a more practical solution than having a pure electric car. It’s a very practical solution for Indian mass-segment customers,” said Behl.

The vehicle has two self-charging highly efficient motors. The new City hybrid will be powered by Honda’s intelligent multi-mode drive (or i-MMD) hybrid technology — the system is a combination of an internal combustion petrol engine and two electric motors.

While Honda had previously tried introducing a hybrid product in India more than 12 years ago, the Civic hybrid was an instant market failure at an asking price of Rs 21.5 lakh (ex-showroom) as it was being imported as a completely built unit.

It had launched the Accord hybrid in 2016, but had to discontinue for the same reasons.

“This is locally manufactured. It makes a huge difference in terms of price for the end-consumer,” said Behl.

Honda in 2020 went for cost rationalisation and consolidated its manufacturing operations at a single plant in Tapukara, Rajasthan. It discontinued production at its older Greater Noida plant from December 2020 and also discontinued the Civic and the CR-V in India.

One big challenge Honda faces in India is the absence in the sport utility vehicle (SUV) segment, which is the fastest-growing category.

Tsumura said he recognises the challenge and is planning to plug the lacunae. Honda is developing an India-focused SUV in 2023.

“The rise in the popularity of utility vehicles is a global phenomenon. We don’t have that line-up of SUVs in India. That’s why we are planning to launch an SUV model next year,” he added.