[RavenAvi]

Honda Cars India Limited has announced an additional investment of around Rs.600 crores in it's two plants at Greater Noida, U.P. and Tapukara, Rajasthan to increase it's production capacities and R&D facilities, according to Shri Raman Kumar Sharma, Senior Vice-President.

The Japanese company's cumulative investment in India so far stands at Rs 7,238 crore and the fresh infusion would increase it to around Rs 7,800 crore.

"By the end of this fiscal, additional investment of Rs 500-600 crore would be made to increase production capacity of our Tapukara plant by 60,000 units from 1,20,000 units to 1,80,000 units per annum and to ramp up our R&D at the Greater Noida unit," company's senior vice president Raman Kumar Sharma told Business Standard here.

About 3-4 years back, the company had also started a rudimentary R&D facility at the plant, which is now being upgraded to a full fledged facility and likely to employ 250-300 people.

"With the new R&D facility, Honda aims at achieving greater localisation of material, technology and production. This would also help Honda in exporting components to other countries as well, including Japan," he underlined. The new R&D block is expected to be inaugurated later this month.

Meanwhile, Honda is aiming to touch total dealership count of 300 by the end of this fiscal, up from 255 across 167 cities at present, including 14 dealerships in 10 cities of UP.

Business Standard

[sgiitk]

I hear Tapukara is in Neemrana, so we may be knowing it better that way. The catch is hiw much (if any) is the deterioration in service.

[S2!!!]

So will this Rs. 500-600 crore be in addition to the Rs. 380 crore that it announced in March 2015 (link to news article)? What I'm not too sure is whether the figure mentioned includes the Rs. 380 crore or is a new investment altogether.

The new R & D centre is scheduled to be inaugurated later this month as per this

[adimicra]

This is all good but their current capacity is 2,40,000 cars annually = 20,000 cars per month. The average monthly sales is hovering aroud 16-18K.

So, why are they trying to ramp up capacity?
Are they trying to make India an export hub?
I don't see Honda hitting 25000 sales per month in the foreseeable future.

The R&D center is a welcome move. What it means is that they can react better to feedback and requirements from the Indian market which will make their cars more desirable and competitive.

[volkman10]

Originally Posted by adimicra

So, why are they trying to ramp up capacity?

Gearing up for the C/SUV called BR-V, I guess.

[S2!!!]

Originally Posted by adimicra

So, why are they trying to ramp up capacity?
Are they trying to make India an export hub?

They're adding more export destinations to the existing list and secondly they're targeting domestic sales of 3 lakh units by 2017.

Link to news article

[RavenAvi]

Honda India is gearing up to launch a number of new models for India in the next few years.

After the BR-V SUV's launch tomorrow, the ones in the pipeline which are being developed as we speak are: a Jazz-based crossover (codenamed 2FM) in 2017, the next-generation Brio hatchback (codenamed 2UA), the next-generation Amaze sedan (codenamed 2UB), and the new-generation Accord & CR-V.

All these models are to be introduced in the Indian market by 2018-19.

Also, the new-generation Accord & CR-V models will see increased localisation content in them which will be upto 65%, quite steep when compared to present models, so that they could be priced competitively in their respective segments when launched.

The plans come amid heightened competition in the Indian car market and Honda’s flagging sales.

The local arm of the Japanese car maker, which had come back strongly in the passenger car market with the new generation City, Jazz and Amaze, saw its fortunes slip in fiscal 2015-16 as new model launches from Maruti Suzuki India Ltd and Hyundai Motor India Ltd, found greater acceptance among car buyers in India.

Honda sold 192,059 units in 2015-16, advancing by a mere 2% over the last year, according to the Society of Indian Automobile Manufacturers.
Its share in the passenger vehicle market dropped to 6.8% from 7.2% in the year-ago period.

Meanwhile, Honda is also expected to step up sourcing of parts from India.
The new generation models of the Accord and CR-V, unlike the previous generation ones, will have 60-65% local content which is higher than before, said one of the three people cited above. “The direction on localisation remains the same; we will do more of what we have been doing,” said the Honda spokesperson cited above, declining to comment on specific model plans.

“Quite a few of their models have seen a free fall in volumes in the recent past, impacting the overall sales adversely. Therefore, the idea is to launch models with a high degree of locally sourced parts so that it can be launched at a competitive price which can in turn get them the much-needed volumes,” said one of the three people cited above.

Live Mint

[Aaron:)]

I really hope that this increased level of localization doesnt come at the cost of quality, like the early examples of the 2014 City.

Also, they need to get out of their stupid mindset that India wants built to cost cars. They are taking steps to improve, (eg the facelifted Amaze with better interiors ),but there's still some way to go.

The Honda of 2016 is launching the BR-V. The Honda of 2012 would've launched the HR-V instead. Hope they're listening.

[rutvij]

Yesterday I drove Hyundai i20 for the first time. I have always found the exterior of the car very pleasing and attractive. I was very impressed with ride and overall quality, fit and finish of the interiors of the car. Creta is also a winner in the segment.

I have a feeling that Hyundai is upping the quality with their each launches. While Honda is going down on the quality in the name of making the car suitable for India.

Their much talked about Brio platform has failed to generate any volumes for them. Apart from Amaze none of the other cars are even on buyers mind in their respective segments. Yesterday I checked out BRV as well. With its limited width it looks out of proportion. It definitely is not an SUV. As an MUV it looks nice but people will compare it with Ertiga and will not find it value for money.

CITY is their star performer. But here also overall quality and fit & finish is unlike Honda. Panel gaps are so prominent that sometimes you feel that boot lid is open!

Above City there is a huge gap till CRV. Here also they have failed to introduce diesel burner which limits the appeal of CRV. I have been a die hard fan of Honda and when I was searching for my next ride I was willing to wait for HRV/Civic. But it was not to be and I had no option but to go for Skoda Octavia.

I feel that Honda has failed to understand India. People here look for value for money and it does not mean cheap or boring.

[saket77]

There is definitely a huge void in the product portfolio of Honda cars, India. Quite shockingly, City has been their only sedan (10-12 lacs INR) and that hurts them who looked at Honda as a premium badge, at least in India after the Japanese car maker pulled the plug on the Civic and the Accord in India.

There was a time when the diesel engine absence hurt Honda a bit too much and that was the period when most of Indian customers were going the diesel way. Albeit little late to the party, but finally the D-Tec made into the scene pushing the sales of Amaze and even the City. Also, just prior to this period, Honda made a big reshuffle in the portfolio dropping big names like the Civic and the Accord. Brio, Amaze, City and Mobilio were the new weapons in Honda's arsenal; though not to everyone's liking. However, the market share and sales data shows that the company was doing it right if it was a fight for volumes and market share. But Honda must not forget that it has been riding on the premium brand image that it had in India before indulging in the fight for volume strategy, if I may call it so. The dream of an average Indian of a Honda parked in his garage was suddenly within his reach esp by brands like Amaze. There had to be a surge in sales.
Honda consistently states that it will never compromise quality with quantity but then you cannot have your cake and eat it too. Amaze will always be a sufferer I guess for the segment it has to compete in (I'm giving it a benefit of doubt generously) but the City's case is disappointing, esp when this is the most premium sedan in your portfolio at this point of time. Also, considering other premium car maker's models like the Vento, Rapid, Verna, Linea and even the Ciaz competing approximately in the same price bracket.
This is about the current scenario. Going forward, Honda must bring a proper D1 and D2 segment sedan (read the new Civic and Accord) to complete it's lacking portfolio and just stop using the City as an excuse for overlapping (or covering in thoughts of Honda) both C2 and D1 segments. I read on the forum that the new Accord may cost upward of 40 lacs. This may be an excellent recipe for another pricing disaster. Even the Civic over 20 lacs is one, no matter how good it is. And for a moment even if I keep the competition, features, markets etc aside, what is Honda doing to fill the void between its 10 lac City and 22 lac Civic (rough approximation)? Sorry, but the BRV is another ball game altogether. To taste success in the D segment, Honda must close the slot of 15-18 lacs.

This can be done in parallel to their current strategy of volumes and will bring back the old glory that Honda once genuinely took pride of.

Regards,
Saket.

[OSH]

Originally Posted by saket77

There is definitely a huge void in the product portfolio of Honda cars, India. Quite shockingly, City has been their only sedan (10-12 lacs INR) and that hurts them who looked at Honda as a premium badge, at least in India after the Japanese car maker pulled the plug on the Civic and the Accord in India.

Honda has lost the plot of being considered a premuim brand ever since they stopped the Civic and Accord. The image Honda once had around 2005-2010 was that "A Honda is above all". My father had bought the City Zx in 2007 without even having a test drive. I remember him saying that if he was spending 10 lakhs on a car, he wanted a Honda only. Now I realise that the image Civic and Accord had created in the minds of people was somewhat responsible for the success of the City, they can again recreate that scene. Other brands were seriously not considered as competion at that time, I was small at that time but I think Hyundai had the Accent, Maruti had esteem, Ford had the Ikon thats it.

The best line-up according to me should now be : Brio - Amaze/Jazz - BRV/City - HRV - Civic/CRV - Accord. This way the entire price line is sorted. Mobilio should be stopped now no point in wasting factory capacity.

[Aaron:)]

Felt like bumping an old thread

The years 2011-12 brought major troubles for Honda. The market shift towards diesel and the Thailand floods were huge setbacks. They were unable to cash on the Brio which was a thoroughly competent and well priced car, and the price cut on the Jazz didn't make it fly out of the showrooms, as many of us imagined. The Civic and Accord were struggling to match up to better equipped and diesel powered competition and the City was facing the heat too.

They made a huge comeback in 2013 with the Amaze, the first Indian Honda to ever have a diesel option. It was a great package with decent quality for the price and as expected, it was very successful. Then the 2014 City broke all of its records and went on to be a huge blockbuster, and continues to be a strong seller, despite fresh competition.

The last 2 years, however, tell a different story. Honda just sat by the sidelines and watched as brands like Hyundai and Maruti upped their game. The discontinuation of brands like the Civic and Accord meant that Honda had no presence in the premium segment anymore, except for the niche CR-V. In 2014, they launched the Mobilio (Mr. cost cutting) at a ridiculous price. Currently, the top variant of the Mobilio retails at 14.xx lakhs, while the Ertiga costs approximately 10 lakhs. Honda was always known for pricing their cars optimistically, but the Mobilio also brought with it mediocre quality which was never associated with them before. Hyundai made great strides with the Grand i10, Elite i20 and Creta while Maruti tasted success in the premium segment with the Ciaz, Baleno and S-Cross (to an extent). All this while Honda indulged in cost cutting, while diluting their brand value. The BR-V, while a huge improvement, still lacks the quality of the Creta and is priced a bit too optimistically. Tell someone in 2010 about the H playing catch up with the H and they would've laughed.

Honda's rival Toyota too burned their fingers with the Etios twins. But the cars are known to be extremely reliable. Early examples of the '14 City were plagued with various niggles, which even forced certain BHP'ians to sell off their cars.

Honda has lost its mojo, and this sentiment isn't India specific. In the USA too, buyers and critics shared the same sentiment. the 2013 Civic was a major disappointment wrt quality and design. But they are back on the right track with the Accord and the new Civic. But Honda India is still a bit lost.

As of now, they are without doubt in a pretty decent position. But they are under further threat from newer competition. Also, Honda's premium image has been diluted to a certain extent. Monthly sales for May '16 decreased by 17%, and the going is only going to get tougher in the coming months.

So as GTO did in 2011, let's run a SWOT analysis and have a discussion on the brand's way forward.

Strengths

• Despite all the QC niggles, Honda still has a following in India. Just like you can't go wrong with a 7 lakh rupee Swift, you can't go wrong with a 12 lakh rupee City.
• All rounded products. Hondas are generally fuel efficient and spacious, and now also well equipped. The Jazz is the most spacious car in its class while the City can compete with cars from a segment above on space and comfort.
• Safety : All Honda cars come with the ACE body structure, and airbags will soon be made standard across the lineup.

Weaknesses

• Honda does not have a diesel engine for its premium products like the Civic and Accord. The current 1.5 i-DTEC mill though frugal, has some way to go before it can match its rivals on performance and refinement.
• Poor strategy. Honda failed to realise that their premium brand image was a major contributor to their success, and went on to dilute it. From having 3 bestsellers in the premium segment (Civic, Accord, CR-V), they went to having none. Their jab at the mass market also hasn't been fruitful.
• Honda was once a technological tour de force. The first to bring variable valve tech, excellent automatic transmissions and more with the original Honda City. But where is the technological innovation today? Where are the direct-injection petrols, dual-clutch transmissions and turbocharged small capacity petrol motors that your competitors have already introduced in the market?
• The current lineup is heavily dependent on the low cost Brio platform, which hasn't seen much success. They no longer have an international and contemporary lineup of cars.

Opportunities

• The crackdown on diesel is certainly going to help Honda, especially in the D segment. The Camry has proved that Indians are warming up to the idea of hybrid cars, helped in no small measure by the ban on registrations of large diesel cars. Hybrid versions of the Accord and Civic have a good chance of success.
• Honda's current lineup needs a revamp. Discontinue the Brio and Mobilio, add more equipment to the Jazz and bring back the Civic and Accord.

Threats

• Volkswagen,Hyundai & Maruti make for exceedingly formidable competition. The City's leadership is under threat from the Ciaz and next gen Verna, and also SUV's such as the Brezza and Creta on both ends. Hyundai has overtaken Honda in terms of quality and it's time for them to pull their socks up. Indians are now willing to pay for premium products.

[YashD]

Being a Honda loyalist, on one hand it was great to see Honda entering the budget segment with Brio and Amaze then again from the 1st day itself, the game got quite evident. Honda was now looking for numbers instead of quality. There perspective customers had changed! Premium car buyers can step aside, we want Maruti Suzuki buyers using Honda now came into their heads. This is exactly where they went wrong but then desperate times makes one take desperate steps. Except City none of the cars worked for Honda back then, Jazz was a pricing disaster, even after reviving the price it couldn't go anywhere. Both Civic and Accord had became dated products lacking a proper diesel heart, new models were rolling in and Honda didn't had any product which they could have pitched in to the indian consumers hence pulling the plug made more sense to them. The next generation Civic was the only product they had in their hand but it was declared a failure across the world.
Its very disappointing to see that Honda failed to understand the budget market, taking it extremely mileage oriented and how they got the perspective that Indians doesn't care about quality is still alien to me because right there in front of them, Toyota failed with the Etios twins due to the same reason. Consumers didn't accepted the Chevrolet Sail twins either. The only aspect which helped Honda sell it's Amaze was the i-dtec engine, Brio too is a failure even after having such an amazing engine under its hood with the right combination of space, handling and comfort simply because of the dull interiors and evident cost cutting. They somehow understood the same with the launch of Mobilio too but then after the City entered the market, things got quite clear and Honda understood what the consumer wants. The 2016 Amaze came in, Brio is coming soon and both looks like a complete car now. Initially, I would never recommend the Brio twins to any of my friends because frankly such products from the Civic maker wasn't expected. Then again I don't know what happens to the folks at Honda, Same interiors in the BR-V pricing it even more than Mobilio. They take one correct step, ruins it by taking 5 wrong steps.
They have got so much into the number games that they aren't seeing how the premium manufacturer tag is almost gone from their arsenal. The consumers have started comparing it to Maruti Suzuki. (No offense but there was a time when people used to compare Honda with Skoda, Mercs and BMWs, heck! I still remember driving a cousin's Sonata and a guy told me are you insane? Why did you spend 15 lakhs on a Sonata when you could have bought a City!)
They desperately need to up there game and launch the 2016 Civic and Accord in the Indian market, the huge gap between City and CR-V is killing the manufacturer's image further. Thanks to the petrol only engine in CR-V its not selling enough. Right now, a high powered diesel engine is the need of the hour and these folks needs the Civic and Accord right away.

[CrAzY dRiVeR]

Originally Posted by Aaron:)

Weaknesses

• The current lineup is heavily dependent on the low cost Brio platform, which hasn't seen much success. They no longer have an international and contemporary lineup of cars.

Product differentiation within the Brio platform family seems to have been the biggest weakness IMO. When it comes to looks, interiors, features, engine options etc, there have been not much variations across price ranges.

And the Brio family forms 4/6 mainstream vehicles Honda has to offer for India.

[Aaron:)]

Originally Posted by CrAzY dRiVeR

Product differentiation within the Brio platform family seems to have been the biggest weakness IMO. When it comes to looks, interiors, features, engine options etc, there have been not much variations across price ranges.

Completely agree. The Brio when launched in 2011, was a high quality product for its price. The basic dash was acceptable for a 6 lakh rupee car. What Honda failed to realize that the things that are acceptable in a 6 lakh rupee Brio aren't in a 13 lakh rupee Mobilio. Also, it robs each car of its individual feel.