Honda Cars posts 17% growth in 7 months, hopes to sustain in current fiscal

Company is planning six launches in next three years, including upgrades of existing models

Car manufacturer Honda Cars India Ltd, which has posted a growth of around 17 per cent in sales during the first seven months of the fiscal year, expects a similar growth in volume in the current financial year. The company is planning six launches in next three years, said Jnaneswar Sen, senior vice president, marketing and sales, Honda Cars India.

The company has posted a cumulative growth of 17 per cent from April to October 2017, selling 105,503 units as compared to 90,422 units sold during the corresponding period of previous year. The growth was led by two models launched in the year 2017 - the new Honda City and Honda WR-V.

"We are expecting to retain the same growth for the whole year," said Sen. During the last fiscal, the company has sold around 1,57,000 units in India.

During the period, the Indian arm of the Japanese major has also become the largest market for the company in Asia Oceania business region, which excludes China and Japan. The company is looking at further growing its importance in Honda's global operations in future. Last year, the company had sales of 724,000 units in the region with a growth fo around 11.5 per cent.

The company is expecting the new launches, which would be a mix of upgradation of the existing models and launch of new models, would help it to achieve better growth in future. Its premium sedan Honda City has sold seven lakh units so far since its first introduction in the country in 1998. Currently, 25 per cent of the car's worldwide sales is coming from India.

Commenting on the plans on Hybrid and electric vehicles, he said that the company's hybrid offering Accord has seen a decline in demand from four to five cars earlier to almost one car a month after the introduction of Goods and Services Tax (GST), owing to the higher tax rate. The company has started working on the strategy for electric cars in India, he added.

The company's exports of components to its global demand has increased by 157 per cent in the last three years, and hit a Rs 1,140 crore during 2016-17, from Rs 1,036 crore during the previous year. The company exports crankshafts, manual transmissions and others, recently started exporting 1.6-litre diesel engines to Thailand, from its manufacturing facility in Rajasthan. It also exports a small number of cars, around 5,000 units, per year to a few countries.

Honda Cars has a capacity of 2,40,000 units per annum in two facilities, one in Greater Noida in Uttar Pradesh and another in Tapukara, Alwar, in Rajasthan. The current capacity utilisation is around 77 per cent and it can ramp up the Rajasthan facility to increase its capacity to 300,000 units once need arise, said Sen.

The company currently has around 348 showrooms in 234 cities and plans to expand this to 360 showrooms by the end of the year.