Japanese auto major Honda is in the process of developing an all new SUV for the Indian market as it looks to enter the segment which has been growing at a very fast clip, according to a top company official.
The company, which sells models like Amaze, City, Jazz and WR-V in the Indian market, currently lacks presence in the SUV segment after discontinuing CR-V sales last year.
"We have studied how to launch an SUV (in the Indian market). So now we can confirm that we are in the developing phase to launch an India-specific SUV," Honda Cars India Ltd (HCIL) President & CEO Gaku Nakanishi told PTI in an interaction.
He declined to share any details regarding the size or the expected launch time-frame of the product.
Honda has 'notable' presence in sedan segment
Nakanishi, however, noted that the company already has a notable presence in the sedan segment with Amaze and City and now it would like to enter the SUV segment in order to fill the gap which exists in its current product line-up.
He added that according to company estimates, the SUV segment's contribution in the passenger vehicle segment is set to cross 40 per cent in the coming days.
According to the industry estimates, SUV share in the overall passenger vehicle sales currently stands at around 34 per cent.
Nakanishi noted that the company's commitment towards the Indian market remained unchanged and it would continue to offer the best quality products to its customers in the country.
Shift towards SUVs global phenomenon
HCIL Senior Vice President and Director (Sales and Marketing) Rajesh Goel noted that the shift towards SUVs is a global phenomenon but in India it was slightly more owing to road and traffic conditions.
He, however, said that despite a strong pull towards SUV sales, the market continues to see decent sales of sedans as well.
"We have multiple segments in the Indian market and every segment has a particular space. So there would be customers who would keep preferring sedans. A lot of sedan launches by luxury carmakers in the last one year is proof that demand is there for such models," Goel said.
EVs to start with hybrid vehicles
When asked about the company's plans regarding the EV space, Nakanishi noted that Honda's electrification journey in the country would start with hybrid vehicles.
"Due to the second COVID wave the launch timings are a bit delayed... next year we have plans to launch a hybrid product," he added without sharing any details.
Goel noted that the automaker has spent the last one year taking various measures, including closure of the Greater Noida plant, to strengthen its overall structure to make it sustainable and risk-free for the future.
"We are in a much stronger position now. The capacity utilisation is now significantly higher than what it was seven years ago. So various measures have been taken and we are on the right path now. That is what is going to help us in the coming days," he added.
Adding to that, Nakanishi pointed out that increase in exports was also helping in better utilisation of the production capacity at the company's Tapukara (Rajasthan)-based manufacturing plant.
"We are now exporting City to various countries like Mexico, Turkey, Middle East etc... Amaze is also being shipped to South Africa and neighbouring countries like Nepal and Bhutan. We are looking at a four-time increase in exports this fiscal," he noted.
The company's overall overseas shipments last fiscal stood at 5,131 units.
Domestic market improving at faster pace
Commenting on the domestic market, Goel noted: "I think the market has been improving at a much faster pace than the industry had expected and it is reflected in the July numbers as we see growth in both wholesales and retail numbers."
Going forward this growth momentum should continue but there could be two dampers -- one is semiconductor shortage and secondly, an increase in car prices due to rise in raw material cost could negatively impact the demand, he added.
"As far as we are concerned, we have managed the semiconductor shortage fairly well. Based on the visibility that we have from our suppliers, we do not see a significant impact in the future but we are monitoring the situation closely," Goel said.
Various schemes planned for festive season
On outlook for the upcoming festive season, he noted: "We are keeping our fingers crossed. We believe like it happened last year, the festive season is going to help us push the volumes. We are working on various schemes, tying up with various banks for retail finance. ...so we can say our preparations are in full swing."
On the launch of new Amaze, Goel noted that the company has tried to make it more appealing to the customer with the introduction of new features and changes in the exterior and interior styling.
"We have a solid position in the compact sedan segment and we have been consistently doing more than our projected volumes...in many states we have a leading position in the segment," he added.
The Amaze competes with the likes of Maruti Dzire and Hyundai Aura. The segment is witnessing de-growth for some time now due to the market shift happening towards SUV body styles.
