STRONG demand for diesel sedans City and Amaze catapulted Honda to the position of the third-largest passenger car maker in the country last fiscal, 19 years after it entered the Indian market.
Honda overtook both Tata Motors and Ford India and is now behind only Maruti Suzuki and Hyundai India; Honda, which sold 1.33 lakh passenger cars in FY14, had been the fifth-largest player a year before in FY13 with car sales of 73,182 units.
In the overall passenger vehicle segment, which includes cars, utility vehicles and vans, the Japanese carmaker did even better. It jumped three positions —from eighth to fifth, driving past General Motors India, Ford and Toyota, clocking volumes of 1.34 lakh units, up 83%.
As a result, Honda’s market share in the country’s 25 lakh unit passenger vehicle market rose by 263 basis points to 5.36% in FY14, while other major players like Tata Motors and Mahindra & Mahindra (M&M) saw declines of 376 bps and 141 bps, respectively.
Jnaneswar Sen, senior vice-president, marketing & sales, at Honda Cars India told FE: “The introduction of the diesel engine has really worked for us. The Amaze helped us enter a new segment where we were not present earlier and the City has got a strong start.”
With an annual manufacturing capacity at over 2.4 lakh units and its third plant expected to come up in possibly in Gujarat, the Japanese major is looking to close in on Hyundai. The gap between the two, in terms of production for the domestic market, is currently just over one lakh vehicles.
With two new products planned for this year – the compact MPV Mobilio and the new Jazz, both with diesel options – and a new manufacturing plant at Tapukara (Rajasthan), the company is well-positioned to take on the top players.
“In the the next quarter, we will launch the Mobilio, which will expand our playing field in a new segment. Thereafter, we will re-enter the premium hatchback segment with Jazz,” Sen said. He added that the sales network will also go up from 117 to 230 outlets, with 43 new cities being covered the current in addition to the present 107.
Honda’s strong growth has come largely on the back of its new sedans which, for the first time, are also available with a diesel engine (its new 1.5 litre i-DTEC powerplant) besides petrol. While Honda’s growth spree started