New Delhi: Japanese car maker Honda Motor Co. is looking to cash in on India’s free trade agreement (FTA) with South-East Asian countries to eventually make the operations here a key part of its global business.
“India is a big market and we have made big investments in expanding our business. We will continue to invest in this market,” Honda Motor president and chief executive officer (CEO) Takeo Fukui told reporters here on Thursday.
With the implementation of FTA between India and the Association of Southeast Asian Nations (Asean), the company plans to source components from India for its manufacturing sites in that region.
“The FTA between India and Asean countries will create new opportunities for our operations in India, specially in sharing components. With FTA, lot of components can be sourced from India and there will be a lot of possibilities for Indian vendors to supply to our global operations,” said Fumihiko Ike, Honda Asia president and CEO. The current level of component sourcing, however, is low, he added.
Honda Siel Cars India Ltd president and CEO Masahiro Takedagawa said the company could “enjoy volume advantage” by sharing components between India and the Asean member states.
A model such as the City sedan is high on local components in India, but low in Thailand. It could benefit from Indian components in Thailand once FTA kicks in next year, he added. “Similarly Civic has low local components in India, but high in Thailand. With this FTA, this can even out,” he said.
Honda Siel on Thursday launched a third generation of the City in India, priced at between Rs7.7 lakh and Rs8.9 lakh (ex-showroom Delhi). The new Honda City would come in three different grades with both automatic and manual transmissions and would be available with a 1.5-litre i-VTEC engine.
“With this launch, India will become the largest market for Honda City,” Takedagawa said. Before India, the company had introduced its new City in Thailand. Honda City is being produced in seven countries and sold in 39 countries across the world. The company also plans to add a small car to its portfolio, which would be smaller than its existing hatchback ‘Jazz’. “Today, rising oil prices is a big issue and mileage of a car will be an important factor in the future. We are currently developing a smaller car than Jazz, which will be launched keeping in mind the global perspective,” Fukui said.