The two Japanese automakers, Toyota and Honda have adopted different strategies in the Indian market which vary according to their global strategies for the future.
The Indian automotive market has always been very interesting when you look at it from a different perspective. There have been many cases wherein the cars which sold in huge numbers worldwide didn’t find many customers in the country whereas some cars which aren’t even suitable for other countries were lapped by Indian customers. This has given sleepless nights to almost all car companies in India. We take a look at Toyota and Honda to analyse how their strategies differ and how it has helped them.
Both Honda and Toyota entered the Indian market in the late 90’s and since then they have been fringe players in the market with a market share hovering in the low single digits. They had a limited portfolio and made smaller investments in the country. This combined with the fact that their early launches (Honda City and Toyota Qualis) were very successful in the country helped them stay in the market. Within the past 2 years, both the Japanese giants have diverged on to different paths and are now concentrating on different aspects.
Honda got a new lease of life in India with the launch of their Earth-Dreams diesel engine which found its way under the hood of the Amaze, City and Mobilio. For a long time, the company was reluctant to launch a diesel powerplant in the country since petrol engines were its forte. But they eventually had to since they wanted to grab volumes which was only possible by the launch of diesel powered cars, as was the preferred choice of customers. This step rose its sales by 67% in 2014 when the overall market sales grew by just 0.66%. Toyota saw a decline in sales in the year 2014 and sold 1.3 lakh cars which is down by 7.7% from 2013.
Suddenly, Honda overtook Toyota in the market share chart. Honda stood at 7% due to tremendous sales growth whereas Toyota stood at 5.2% due to decline in sales. Toyota realized that the affordable car space is something it won’t be able to work in and decided that it would mainly concentrate on its premium offerings which have always been the best sellers in their respective segments. They plan to concentrate on providing safer vehicles to the customers and increasing their profit figures. Honda on the other hand is looking for sales growth through the Asian region of which India is a big part.
Honda will make its presence felt in all the high selling segments and will be launching the Jazz hatchback and a compact SUV in India soon. Toyota on the other hand will be launching the next generation Innova as well as the all new Fortuner in the country. Since Honda is concentrating on the market, India gets a lot of attention at the Japanese headquarters. Toyota on the other hand is looking at mature markets like the USA to increase its sales numbers. It has also decided not to start any new plants before 2016 due to an over capacity which was a result of a big expansion in the past.