)
Honda's recent track record has been patchy. While it enjoyed the segment leader position with the Honda City and Civic for years, the company seems to have lost the plot in recent years. For example, Volkswagen's Vento has dented the market share of its best-selling car, City, which suddenly looks over-priced. Same was the perception about the Honda Jazz. The Civic also has lost ground the small car, Brio, at Rs 5-6 lakh is considered expensive.
But the Japanese automotive brand seems to be in a comeback mode. Three years of intense planning by Honda's engineering and sales team gave birth to its new family car, Amaze, for the Indian market. The concept was structured around what Honda calls 'smart micro limousine'.
Amaze, Honda's first diesel car in the Indian market, marks the beginning of a new strategy to challenge the dominance of market leader Maruti Suzuki in one of its most profitable segments.
More From This Section
Taking on the market leaders in each of the segments means the company had to plug the gaps where it was not present. For example, in cars, Honda knew it had to do something to change its fortunes in India where its market share stands at a dismal 2.73 per cent at 73,483 units, even though it had an array of models such as Civic, CR-V, City, Jazz and Accord. But the problem was that the company was absent in those segments where players like Maruti Suzuki and Hyundai play a more assertive role.
Amaze may be the first step in that process. At Rs 4.99 lakh for the Amaze, Honda has not only broken the stereotype of being a premium brand, it has also aggressively challenged India's top-selling sedan DZire made by Maruti Suzuki.
The same desire to plug the gap is evident in its two-wheeler strategy as well. HMSI, which has successfully consolidated its presence in the two-wheeler market through the less-competitive automatic scooters, is now launching a slew of 100cc motorcycles, a segment that is significantly controlled by Delhi-based Hero MotoCorp. More than three-fourths of Hero's total sales (nearly six million units last financial year) come from the bread-and-butter 100-110cc segment.
So 10 months ago, Honda entered that segment through its 109cc Dream Yuga. The encouraging response has now prompted Honda to gear up for more complementary products in this segment.
Riding high on the Dream Yuga, Honda has more than doubled its market share in the 100-110cc space to five per cent in 2012-13, according to Society of Indian Automobiles Manufacturers (SIAM) data, from a little more than two per cent in 2011-12. Hero, with products such as Dawn, Splendor and Passion in the same segment, suffered a market share loss during the same period to 69 per cent from nearly 73 per cent. Honda has promised to introduce more pocket-friendly 100-110cc motorcycles in the immediate future.
Honda has already stated that the company could become the top two-wheeler company in India in the next two to three years.
During the last financial year, Hero's domestic sales dipped by two per cent to 5.91 million units compared to the previous year. During the same year, Honda's sales breached the two million mark to 2.60 million units - growing by 31 per cent.
Honda Cars India president and CEO Hironori Kanayama doesn't mince words when he says, "Our entry would not just increase the market size (of the compact sedan segment), we will get a share of the competitor's too. The Maruti Suzuki DZire has a market share of around 50 per cent".
Appointed last year as the India head, Kanayama, unlike its predecessors, will be focusing only on Honda's car business in India. His mandate is to 'push Honda up the ranks', say sources within the company. The previous India heads of Honda was also a director of the two-wheeler company.
The Amaze is the first of five new products promised by Honda for India by 2015. Other models include a compact sports utility vehicle, a multi-purpose vehicle based on the Brio platform and an all-new Jazz and City, though the company remains silent on confirming the SUV launch.
Additionally, in an effort to bring down its entry price level, Honda is also exploring the segment below the Brio to attract more buyers. As per the SIAM data, Maruti Suzuki with models like Wagon R, Alto and A-star, controls 75 per cent of the segment of mini-hatchbacks.
Unlike in the past with an urban-focused line-up, Honda Cars is now taking its products to Tier II and Tier III markets. In fact, more than 60 per cent of the Amaze volumes are expected to come from non-Tier I centers, according to Kanayama.
For the first time ever, Honda is promoting Amaze in eight languages.
"The Dream Yuga and Amaze are the early examples of disruptive marketing," says an industry analyst.
