[Poitive]

While most seem to be writing the epitaph of Honda, is it possible that they are waiting for some clarity in government policies, especially with respect to EV and alternate fuels?

Auto making is capital intensive and investments are made based on long term outlook, which in turn depends on multiple factors including the above. Recovery of such capital happens over a long stretch of time. I would imagine companies to want to invest with much caution when the medium-term outlook is highly unstable with big and large changes likely. Honda headquarters might have different vision of the future than our immediate demands.

Maybe we need to wait a while before the final word on Honda.

[aerohit]

If any company leaves India - they will leave happily, not sadly.

They rather make money in markets which offer stable policies, fair tax and good infra.

[careind]

Originally Posted by Poitive

While most seem to be writing the epitaph of Honda, is it possible that they are waiting for some clarity in government policies, especially with respect to EV and alternate fuels?

Policies are the same for all the players in the field at any given time. We have new players coming in and sizzling - Kia / MG, and new players not so sizzling, but still new players - Citroen / Stellantis. They have opened shop because they believe they can get something out of the market.

The point is that Honda with its experience in India could have easily diversified in the meanwhile like the other brands. With their global portfolio, they could easily have put in stopgaps. For some reason, they didn’t and they have also brought down the curtains on some of their products without providing any alternatives in the segment, which doesn’t augur well.

There are other manufacturers as well coming in the future, like Tesla , which would add tremendous pressure to Toyota if they are in a quandary and keep dragging their feet.

[deepcdc]

Pardon me if I didn't read all the replies right, but I did not see MG here.

I think the core to sustaining automobile industry in India is the range of products, I might be wrong but if a brand can afford a range of low, medium and high priced product (albeit one in every segment) can stay afloat.

Not to mention the tango between brands under a single umbrella, eg. Kia for Hyundai, Lexus for Toyota etc.

I understand this argument nullifies brands like BMW and Mercedes, but they in their segment also have a low, medium, high priced cars. Case in point for entry level the A class.

This is an interesting thread ! Thanks for starting it.

[Poitive]

Originally Posted by Poitive

...Honda, is it possible that they are waiting for some clarity in government policies, especially with respect to EV and alternate fuels?
....
Maybe we need to wait a while before the final word on Honda.

Originally Posted by aerohit

If any company leaves India - they will leave happily, not sadly.

They rather make money in markets which offer stable policies, fair tax and good infra.

Not sure what one might mean by "company", aerohit mate. Many lose jobs and it is not a happy situation. Not for the ones who worked to set shop in another country and tried to make it work either. It really is sad situation, IMHO.

Many countries with the above criteria are already saturated.

~~~~~~~

The Indian market has been seen a major potential area of growth after the more developed markets have quite saturated, and it is this potential which kept manufacturers in India for long, despite posting losses. The potential.

However, few have actually been able to crack the value-driven Indian market; and one which values things different from what corporate honchos might focus on - partly due to training and mindset, and partly due to more rigid corporate structures in big corporations. Beyond a point, they too often tend to be bureaucratic in approach. A case in point is Ford, as highlighted in my first post on this thread.

Companies also face issues due to their core-strengths being different from what a certain market values (good engineering, as a loose example), and there isn't enough space in the market for many players offering the same core-strength to a small segment (inefficient return on capital). A few will become unviable, as they have, despite deep pockets and their desire to stay.

At times, it becomes an issue of cutting one's losses.

~~~~
I could go on about govt policies and it's effects and reasons, and how one might need some to get the change that we so desire in the overall landscape, but that would become a rather political discussion for an auto forum, so will refrain.

Originally Posted by careind

Policies are the same for all the players in the field at any given time. We have new players coming in and sizzling - Kia/MG - and new players not so sizzling, but still new players - Citroen/ Stela this. They have opened shop because they believe they can get something out of the market.

True, the policies are the same as they have been, yet some companies have gone the local production route, whereas some the CBU route. Same policies does not imply that they suit a company, it's portfolio, it's plans, it's break-up of global investments, and it's synergies in the global landscape in an ever connected supply chain similar.

The point is that Honda with its experience in India could have easily diversified in the meanwhile like the other brands, what With their global portfolio, they could easily have put in stopgaps. ...

I am not saying that Honda will survive. Just that there are likely factors in Honda's consideration way beyond what might be getting discussed on this thread. Global corporation's priorities and reasons are often not as simple to figure out as (barely) touched upon in the above section.

What if they are planning to not investment in stop-gap and conserve capital to go all out with hybrid and EV tech, which they are good at?

My thought is that we simply don't know enough, mate.

Originally Posted by deepcdc

Pardon me if I didn't read all the replies right, but I did not see MG here.

Unless there are political reasons for them quitting, which there will might be (whether they are seen by the public or not), I think MG actually has a better chance of staying in India than many others. I say this mainly based on (barring the odd blip), how seriously they seem to have gone about their business. They are giving the kind of assurance a customer needs to sign a cheque for a new company (eg: warranties, cheap service packages, quality service centres, road side assistance etc). In a sense, it is like a capital investment to establish a brand (Amazon is a good example of working at a low/below margin to start with). They are also making their more expensive products work before entering the lower segments, to create a sense of premium positioning despite Chinese origins.

Without going into further details, IMO, they are approaching it smartly. I say this after some thought and understanding, as I am in the market for a vehicle (just started a thread for Choosing an SUV under 22L) where the Hector is much in consideration.

[sunikkat]

Originally Posted by aerohit

If any company leaves India - they will leave happily, not sadly.

They rather make money in markets which offer stable policies, fair tax and good infra.

We can keep blaming policies, and I don’t deny there might be many things wrong in that and not favourable to auto market. But let’s keep that and the market preference for a different day.

What’s important is with the same policies some companies are doing really well, some are trying really hard (eg: VAG, Renault) and some are just being complacent and blaming the policies (eg: Honda).
When is the last time we have really seen a full hearted effort from Honda? They are still stuck in that iVTEC engines while globally they have good turbo engines. There is no roadmap for them in India, at least visible for public.

Having said that I strongly believe they will not exit India. Infact I am a strong believer that, other than small ones like Isuzu, no other manufacturer will exit anymore. On the contrary we will see more players coming in, like Tesla and others. Indian market is maturing and future will see Maruti gradually losing their share and other companies increasing.

[amavin]

Have 2 Hondas in the garage and intend to keep one of them for a few more years. Had a bad experience of the (lack of) availability of their spares across the counter (was getting the car fixed up at the neighborhood Bosch center). I hope they ensure spares availability even if they exit the market. If I recall correctly, it was weeks before the Bosch folks were able to source spares for the repair.

[sedanlover2021]

Originally Posted by One

When you purchase your next car, just let us know which car brand it is

Haha. You can definitely avoid buying from that brand

[Poitive]

An interesting video by CNBC International on Ford's departure from India. While discussing this, it also broadly touches upon reasons why a company might quit a county.

https://m.youtube.com/watch?v=Bpdp7iB_rYU

The last 1.5 minutes touches upon the effect of changes due to EV tech, on viability.

[GTO]

Mod Note: We feel that the topic has been discussed enough, and the thread has run its course. Closing thread. Thank you for the discussion.