However, its India subsidiary Honda Cars India (HCIL), is readying a strategy including a series of launches in compact and premium segments, introduction of diesel variants and increased thrust on exports to fill up the wide gaps in operations.
Starting next year the company will begin the introductions of diesel variants, to be first seen on a C segment sedan which be based on the Brio compact car. Gradually the same engine will be seen in other models offered to the domestic market.
However, none of the current generation models of Honda will get the diesel engine as an entirely new line-up of cars is being readied by the company. The current generation City sedan will make way for a completely new, next generation model which would be offered in diesel option also.
Further, the fastest growing passenger vehicle segment of utility vehicles will also see some action from Honda. The company is studying the possibility of introducing a utility vehicle in India perhaps in the sports utility vehicle or the multi-utility vehicle segment.
Honda, which has an all-diesel line-up in India is desperate to bring the small capacity diesel engine it has developed independently by its parent company. Though HCIL's overall sales increased by 46 per cent to 35,440 units this financial year so far, sales of the City sedan dipped to 14,293 units, a drop of 28 per cent in the same period.
Hironori Kanayama, president and chief executive, HCIL said, "We have made significant changes to the new model line-up which will be seen over the next year. We have decided on a number of new model launches...we have started investment on the diesel engine facility and it will be ready by the end of the year. We have invested in a completely new line".
Kanayama was speaking on the sidelines of the announcement of shipping the first batch of 390 Honda Brio cars from the Mumbai Port to South Africa and South Africa Development Community countries.
The company, which is also the lead country for the Brio, will increasingly lay down greater focus on exports from India as the country has met all required quality parameters of international standards. Emerging markets of Asia and Oceania will thus be served from India in the future.
Diesel on the Brio model will depend on the response for the diesel engine on the sedan from the local market. The company will take a call on its introduction on the small car at a later stage. HCIL, however, clarified that the Brio will remain as the entry level model for it in India and it has not plans to look at the segment where the newly launched Maruti Alto 800 sells.
The company is also looking at having three to four models running on diesel engines in the next two years. Its six model-line up in India presently includes Brio, Jazz, City, Civic, Accord and CR-V. This may be extended to ten or more in the next couple of years with increased sharing of platforms amongst the various models.
"The demand for UVs in India will increase therefore we have not finalised yet but we can study on the segment in the future. Any model has to be locally optimised. Honda's global line up of UV is one of our options however India is a very unique therefore like Brio we have to develop a car which is good for the Indian market or for emerging market", added Kanayama.
Looking at the aggression of companies in the sub-4 meter space with the likes of Mahindra Quanto, Ford Eco Sport, Tata Indigo eCS and Maruti Dzire, Honda has not ruled out its own participation in that segment. The sub-4 meter space in India enjoys reduced excise duty charges enticing companies to develop new products including sedans, SUVs and hatchbacks.