Honda bets big on sales of Mobilio

Sentiment of car buyers has become a big challenge for companies like Honda due to diesel issue, says Honda official

Car maker Honda Cars India is planning to strengthen its position in commercial passenger carrier segment with its multi-purpose vehicle (MPV), the Mobilio.  Honda said it needed to strengthen its relationship to make the product a success with customers.

Speaking at the launch of the new Honda BR-V compact sports utility vehicle (SUV), Jnaneswar Sen, senior vice-president in marketing and sales, said every company has strategy and for Honda, it had been retail and corporate.

“Globally, there are no Honda cars with meter taxis. Globally and in India, Honda's presence is very limited in the commercial passenger carrier segment space,” Sen said. Going forward, Honda would focus more on hotels and fleet operators to strengthen its presence in this segment, dominated by the Toyota Innova, he added.

Honda sold 8,064 units of the Mobilio, largely for personal use. The company sold 192,000 units in 2015-16. Sen said Honda was targeting a double-digit growth this financial year and would be launching a hybrid Honda Accord.

He added Honda had received 4,000 bookings for the BR-V.

To support the target, Honda will increase its dealer network from 298 to 340 by March 2017, plans to launch a hybrid Honda Accord.

Honda is also expanding its production capacity at its Rajasthan plant by 60,000 units per annum to Rs 180,000 units annually at an outlay of around Rs 380 crore.

With this Honda Cars total production capacity will go up to 300,000 units per annum.

On Exports, he said exports from India are low since the company has plants in all the regions. Last year the company exported around 5,000 units mainly to South African market. Exports of engine components is expected to be around Rs 1,400 crore this year an increase of Rs 400 crore over last year.

On diesel ban impact in NCR

Sen said sentiment of car buyers has become a big challenge for companies like Honda.

It may be noted due to ban on registration of diesel engine cars with higher capacity and the infrastructure cess, which was introduced in the last Union Budget, have affected OEMs.

He said, the gap between diesel and petrol prices narrowed the shift customer shift from diesel to petrol was gradual and the companies were able to manage that.

For instance, Sen noted, of the total Honda City's sales around 60 per cent used to be petrol and balance is diesel version. During the fourth quarter petrol version share was around 72 per cent. “We cannot adopt so quickly, it is a big problem not only for Honda, for the industry also. We don't know what is going to happen next.”

But with the apex court banning registration of high powered diesel cars in the National Capital Region (NCR), the customers now are preferring petrol engine cars.

He said on one hand there is a waiting list for petrol cars, there are cars-diesel powered ones- that are waiting for customers.

Speaking about the company’s new model-Honda BR-V- he said the model will address the unmet needs of the segment like the third row seat.