New Delhi: Honda Motor Co.’s Indian subsidiary expects car sales to grow in the coming months as falling interest rates and increased financing options bring back car buyers.
“We’ll probably have another record month, this month,” said Masahiro Takedagawa, president and chief executive of Honda Siel Cars India Ltd on the sidelines of an event to launch the company’s Accord V6 model.
Last month the company had registered sales volumes of 5,579 cars, a 47% growth from a year ago. This was mainly due to demand for the new version of its City model.
Even so the company has no plans to start production at its second plant at Tapukara in Rajasthan for the next two years, Takedagawa said. On 27 February, he had said that all expansions plans for the company had been indefinitely postponed.
For now Honda makes about 60,000 cars at a factory at Greater Noida, which, last year, had its capacity expanded to make 100,000 cars. With the revival in car sales, the company expects to post single digit growth this year.
Honda plans to go ahead with the launch of the Jazz hatchback this June. Based on the same platform as its City model, the Jazz would be sold as a premium hatchback. Takedagawa hinted that it would be priced below the City as the Indian market is extremely “price sensitive”. In Thailand, for instance, the Jazz retails for more than the City.
Like its counterparts, Honda too has been hit hard with the rupee’s depreciation against the dollar. Last week it raised prices on all models by between Rs30,000 toRs101,000.
Honda plans to increase local content in its India made cars, which presently stands at between 26% and 74% depending on the model.