Honda is looking to garner a larger market share in India and understands that a domestically developed model will help achieve the same faster.
With a 7.2 percent market share in India, Honda Cars is one of the popular automakers in the country that have managed to retain its position despite all ups and downs. However, the company is looking to improve its market share further and conveyed that building a small car specifically for India is necessary. If the Japanese automaker does green light this project, it will be the first model to emerge out of Honda’s local R&D centre.
Honda India is studying the market for a domestically developed hatchback, but instead of a build-to-cost entry-level small car, the automaker is looking to introduce a slightly upmarket hatchback that will be positioned above the Maruti Alto and Wagon R. The details on the model have not been revealed yet nor is the timeline for launch. Having said that, experts suggest that the small car is likely to be introduced by 2020 and could see a production of 1,50,000 units per year with 50,000 units reserved for exports.
Coming to the development of the small car, the chassis and powertrain will be heavily influenced by the headquarters in Japan, whereas the exterior and interior design will be developed by the local R&D centre. Honda’s global philosophy of ‘man maximum, machine minimum’ for interior space will be retained as well, given the demand of Indian customers to accommodate more in less.
Over the years, Honda has created a strong supplier base in the country with over 80 percent components locally sourced. The same can be expected to be well over 95 percent on the locally developed small car helping keep prices competitive. The automaker also stated that the decision to not go for an entry-level small car comes from the consumer’s shift in car-buying preferences who are opting for more tech and safety features over a budget constrained offering.