Honda India bets on 3 new models for turnaround
NEW DELHI: Honda India is charting out plans to turn around its operations
in India by driving in three new models, including a compact SUV.
Faced with high inventory, declining volumes and sudden shift in buyer
demand from diesel to petrol variants, Honda India plans to launch hybrid
version of the Accord sedan and the global Civic mid-size to revive its
fortunes in on one of the fastest growing auto markets of the world.
Yoichiro Ueno, the newly-appointed president and CEO of Honda Cars India,
said the mini-SUV segment looks promising. "The growth in the category is
significant, and we believe that it will continue. Honda is now considering how
to capture the SUV segment," he told TOI.
On slide in sales, he said the company has managed to control some of the
issues plaguing the business in India. "When I took charge, we had high
inventories... The January-March quarter had been below expectations,"
Ueno said.
Sudden shift in buyer demand from diesel to petrol variants has also upset
the company's strategy. A poor faring by some of the models also made matters
difficult, particularly the bad response to Mobilio MPV that was launched in
July 2014.
"When I met the dealers, they were suffering from financial situations.
They wanted to liquidate inventories," Ueno said. The dealers had been
carrying inventory of about 2-2.5 months against healthy levels of three weeks
to one month. The company has since corrected the situation by reducing
deliveries to dealerships, which perhaps was the reason behind the continued
fall in sales.
"There had been a quick shift from diesel to petrol. May be, we had too
much focus on diesel. The alignment of production was too late as we thought
that the shift towards petrol was temporary," the Honda MD said. Ueno said
the situation had been relatively better in the retail market.
Speaking about the problems with the Mobilio, which failed to enthuse buyers,
Ueno said the product did not match up to what the market wanted. "We had
thought that there would be a strong demand for three-row seating in the
private-customer segment... But the customers did not see the benefit. Also,
the price was a bit higher than customer expectations."
Source : Honda
India bets on 3 new models for turnaround