Indian auto market holds bigger responsibilities for Honda

Tuesday 11 October 2011, 10:33 AM by

The recent unveiling of the highly dependable Brio by Honda Siel Cars India has unlocked many doors of success for the car maker, with the completely strategised entry into the small car segment of the flourishing Indian auto market. However, besides working towards its advantage, Honda has allowed the positive consequences to trickle-down to India, by shaping its market into a preferred hub for the company's operations in Asia.

Moreover, the company is mulling over expanding its target area beyond Thailand, which is presently the region that witnesses maximum operations across Asia. As a part of its operational strategies, Honda Siel Cars India, in a bid to broaden its ambit, is planning to include Malaysia and Indonesia as its next important targets.

Indian auto market holds bigger responsibilities for Honda  |
Honda Brio Launch

Takashi Nagai, President and Chief Executive Officer of Honda Siel Cars India, was quoted as saying, “Indonesia and Malaysia are growing economies whose needs must be met by Honda more on an exclusive basis. Thailand used to be our hub at one point but times have changed now and divisions within the ASEAN region are now inevitable.”

However, it is important to note that the idea of Brio being produced in Malaysia or Indonesia has not yet got the green signal, though it has been made a part of the Thailand's eco car project. “Brio is an Asian exclusive car as of now which is solely meant for Thailand and India. In addition, there will be small exports from here to Sri Lanka, Nepal and Bhutan,” Nagai further confirmed.

Stressing upon India and confirming the relevance that the country holds for the Japanese car maker, Nagai said that India is “particularly important” for Honda, owing to the infinite size of the market and agility in economic growth. Further, India is expected to emerge as the Japanese auto maker's largest two-wheeler base in the coming five years as it speeds up its business activities, following its separation from the Hero group.

“India could play a bigger global role in the future for cars too though the domestic market is top priority for the moment,” he further claimed. Seeing the pace of its operations, one can conclude that the near future could surely witness Honda exporting fuel-efficient cars such as the Brio to regions like Europe. However, the validity of such future events would completely be decided by the situations that would prevail in the global economy, which is presently incompatible.

Analysts say, “Traditionally, Japanese auto makers preferred to ship out components from Thailand which was their manufacturing base. This was because they had greater faith in the quality of their Thai joint ventures. It is now clear that Indian suppliers have come into their own and ready to take on bigger global challenges.”

Takashi Nagai said that the Brio has already been concentrated 80 per cent locally and Honda plans to increase the percentage to 90 in the coming months. “Eventually, we would like the local content in our cars to be as high as our motorcycles but this will take some time,” he was quoted as saying.

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