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Honda Cars expects higher growth than automotive sector this fiscal
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SME Times News Bureau | 27 May, 2017
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.
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