Honda to take lease route to tap corporate fleet

Honda Siel Cars India (HSCI) is on a drive to route its premium segment cars, through leasing companies, to be sold in bulk.

The company, which currently markets only upper segment cars is set to aggressively target the corporate fleet segment in the next few months.

While most car manufacturers have so far preferred to deal with corporate fleet sales on their own, the emergence of leasing companies catering exclusively to top corporates has led to a rethink on marketing strategies.

"In India, the percentage of revenues from corporate fleet sales for HSCI is not more than seven per cent of the total turnover of Rs 4000 crore. However, being a car manufacturer dealing in the premium segment, we are eying the corporate fleet pie for which efforts are being made to scale up the number of corporate houses we deal with, in the next few months," Arvind Bhatnagar, national head- sales, HSCI told Business Standard.

HSCI sells about 300 units as part of corporate fleet sales every month of which, almost 80 per cent of the sales are dominated by the City ZX and other variants of the same car. The other preferred car from the Honda stable is the Accord, which according to Bhatnagar is picking up among corporates rapidly.

"With the launch of the third generation CR-V, another member of the D segment, the company is eyeing senior and other top level executives of noted IT companies who fit the owner profile of the car, " said Bhatnagar.

The new CR-V is powered by a 2.4 litre DOHC I-VTEC engine, which delivers a torque of 161 ps at the rate of 5,800 rpm. With the success of its small car, Jazz in Thailand and the same car under the name of Fit in the US, rumours have been afloat that HSCI would launch a small car in India in two years.

The car reportedly sold around 20,000 units in the first month of its launch in Thailand and US. India, with an attractive small car market of 75 per cent, has been on the wish list of almost all top automobile manufacturers.

"Jazz and Fit have been successful models because they were created according to the needs of the respective markets. The problem of adapting the same cars in India would be that unlike the Indian consumer, for the consumer in US and Thailand, small car does not necessarily mean a small priced car. In that regard, we are working on prototypes that would suit Indian market needs," added Bhatnagar.

SCI sold 43,000 units in the last financial year and plans to sell around 60,000 units this year on the back of the launch of the new CR-V.

It has a market share of around 27 per cent in the premium car segment in the country, which makes up about 25 per cent of all automobile sales in the country.