New Delhi: Diminished car sales in developed markets have prompted Honda Motor Co. Ltd to look at India and China with renewed vigour, said chief executive Takanobu Ito.

“We believe India is a market that has great potential," said Ito at a press conference.

Asia focus: Honda Motor Co. chief executive Takanobu Ito (right) with Masahira Takedagawa, president and chief executive, Honda Siel Cars India, during a press conference in New Delhi. Rajkumar / Mint

Ito who is on a two-day visit to take part in joint venture partner Hero Honda Motors Ltd’s 25th anniversary celebrations also outlined Honda’s plans for the Indian market. This is his first overseas visit since taking the top job at Honda in late June.

Unlike rivals Tata Motors Ltd and Renault-Nissan, Honda is not going down the ultra low cost route. On Tuesday, Renault-Nissan chief executive Carlos Ghosn reaffirmed his intention to develop an ultra low cost car in collaboration with two-wheeler maker Bajaj Auto Ltd.

Honda products designed for the Indian market would be technologically advanced yet price competitive, Ito said.

The Japanese company, which also makes cars in partnership with Siddharth Shriram-owned Siel Ltd, is working at developing its own small car for the Indian market. Small cars make up over 70% of cars sold in the Indian market and several auto makers plan to launch such models in the next two years.

Globally, the company plans to piggyback on its Jazz small car to serve the growing demand from customers in developed markets for small cars. The Jazz was launched in India in June.

Also, unlike many of its peers, Honda has no plans to export cars from India. The firm had put off production at its second plant in Tapukara, Rajasthan, due to sluggish demand growth in the Indian market. For the time being, the facility is being used to supply components to its Greater Noida, Uttar Pradesh, facility. In November, it also started exporting crankshafts to Japan.

Honda also stressed that its technical agreement with Hero Honda was of a long-term nature. “Our joint venture agreement is eternal," said Fumihiko Ike, chief operating officer of Asia-Oceania operations.

Recurring labour troubles at Honda Motorcycle and Scooter India Pvt. Ltd’s factory in Manesar, Haryana, have not shaken the company’s commitment to the Indian market. Ike said he was unaware of any past statements on pulling out of Haryana that the company’s Indian managers had made.