As per the sources, Honda Motor Corporation (HMC), the well known Japanese auto maker is planning to merge its automotive entities and combine its diverse holdings into one company in India. However, a spokesperson at Honda Siel Cars India (HSCI), a business alliance between HMC and Shriram Industrial Enterprises Ltd (Siel), refused to share views on the mentioned topic.
In the Indian auto market, HMC is engaged in selling passenger cars, Sport Utility Vehicles (SUV), motorcycles and scooters with the help of two entities, Honda Motorcycle and Scooter India (HMSI) and HSCI. HMSI, a completely owned subsidiary of Honda, manages to sell two-wheelers, whereas HSCI is engaged in carrying passenger vehicle business. In addition, with the help of Usha International Ltd, Siel owns 5 per cent in the auto company, which was established in 1995. Honda marked its presence in the two-wheeler segment through a Joint Venture (JV) with the Munjals, who supported the Hero Group from 1980 to 1999.
During December 2010, HMC declared the discontinuation with the Hero Group, a 26 year old venture in the Hero Honda Motors Ltd and thus, perform business activities solo. Two-wheeler market of the Indian auto industry is counted among the prominent destinations throughout the world and the JV with Munjals barred Honda from concentrating over the Indian operations individually.
From the time then, HMSI expanded its operations and overtook Chennai-based TVS Motor Company. With this amalgamation, the company emerged as the third-largest two-wheeler maker in the country. During this financial year, between April and February HMSI marked 26 per cent growth with 1.78 million units. With this, the company is aiming to emerge as India’s largest two-wheeler maker by the end of 2020 and thereby, is investing a sum of Rs. 1,000 crore to establish its third manufacturing unit in the country.
In the passenger vehicle segment of the Indian market, Honda started sales operations during 1998, with City, the lead ship sedan. Owing to the stiff competition from other international auto makers made the company drop its share in the market over the decade.
The situation was further dropped with the insufficiency of diesel engines. During tenure of April and February, the sales of the company reduced by 22.32 per cent, amounting to 43,411 units. In 2011, Toyota which is another auto maker from the same origin recorded sales of 136,000 units and emerged as India’s fifth-largest car manufacturer.
Although the sales during the period were limited because of limitation in component supply from Thailand and Japan, the volume of HSCI’s witnessed a downfall during the previous financial year. This was the time when the Indian auto industry marked a growth of 29 per cent, which resulted to 2.52 million vehicles.
After selling large cars for more than a decade, during October last year, Honda introduced its first small car Brio.
