Honda Cars Expects Higher Growth Than Automotive Sector This Fiscal
By Indo-Asian News Service
3 mins read
Published on May 27, 2017
- Honda Cars India registered over 38 per cent growth in April
- The company says new models have contributed significantly to its growth
- It expects to do a better than the sector's likely growth rate of 7-8%
After 18 percent degrowth in sales volume during 2016-17, Honda Cars India registered over 38 percent growth in April and expects to do "a bit" better than the likely growth rate of 7-8 percent of the automotive sector during the current fiscal.
Yoichiro Ueno, President and CEO, Honda Cars India, told reporters here on Friday that the company began the new calendar year on a positive note with overall sales growing by 9 percent during January-April 2017 compared to the same period last year. He hopes the company will post consistent growth in the coming months.
However, like other auto majors, Honda is keeping its fingers crossed on the impact that the Goods and Services Tax (GST) will have on their sales and the overall market during 2017-18.
Honda, the fourth largest manufacturer of passengers cars in India, registered 38.1 percent growth in April, which is the highest ever for the month.
Ueno said new models including New City and Honda WR-V contributed significantly to this sales growth. It received over 30,000 bookings for Honda City since its launch in mid-February and 16,000 bookings for WR-V since its launch in mid-March.
Honda sold 1,57,313 cars during 2016-17, a degrowth of 18 percent. Terming the previous fiscal a tough and challenging year, Ueno attributed the decline in sales to a combination of factors including high inventory at the beginning of the year, change in the fuel preference of the customers and demonetisation.
Despite the challenges, the passenger car market in the country grew by 9.2 percent. India was the fifth largest market in the world, closely behind Germany.
The Honda CEO believes that if the current growth trend continues, India will overtake Germany to become the fourth largest market during the current year. He said India had the potential to overtake Japan in five years to become third largest market after China and the US.
Stating that India will witness real motorisation like China between 2020-2030, Ueno said Honda would reinforce the brand and focus both on the product and enhancing customer experience.
He said while maintaining its positioning as premium brand, Honda was also trying to have presence in entry level cars with reasonable pricing.
Ueno said Honda had been receiving lot of inquiries as to when their topmost brands like HR-V and Civic will be introduced in India. "HR-V is one of the options for Indian market but we are assessing," he said adding that the SUV may be "a bit expensive".
The company has two manufacturing facilities in India - Greater Noida and Tapukara in Rajasthan. It has made cumulative investments of Rs.8,600 crore in the two plants, which together have installed capacity of 3 lakh units per annum and employ 9,800 people.
The two manufacturing facilities currently operate at a capacity of 2.40 lakh units a year. The plant in Rajasthan also manufactures components for Honda's global operations. The high quality components are exported to 15 countries. The export turnover in 2016-17 was Rs 1,140 crore. He said it has been growing by 157 percent over last three years.
Anita Sharma, Assistant Vice President, marketing, Honda Cars, said they were acquiring land in Gujarat for their third plant. She said this plant would be part of their long-term plan.
Honda Cars has dealership network presence of 345 facilities across 230 cities in India. It plans to add 29 new dealerships and enter 22 new cities in the current fiscal.
Honda, the 8th biggest automobile company in the world, has 137 plants in 41 countries.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
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