Honda expects sales to pick up during festive season

Honda expects sales to pick up during festive season

New Delhi: Japanese car major Honda on 11 September said it expects sales to pick up during the festive season as consumers are expected to loosen their purse strings after prolonged purchase postponements due to high interest rates.

“High interest rates to an extent have affected our sales. But demand is likely to pick up during the festive season as we expect consumers who had postponed purchases to start buying," Honda Siel Cars India Chief Executive Officer and President Masahiro Takedagawa told reporters here.

Keeping the festive season in mind, the company on 11 September launched refurbished versions of its sedan ‘City´ coinciding with the company’s 10th anniversary in India, priced between 6.80 lakh and 8.65 lakh (ex-showroom Delhi).

Except for the top-end ‘Vtec’, rest of the three variants, which are loaded with extra features, would be costlier by 3,000 from the existing ones.

Asked if the high pricing of the new City would put it at a disadvantage against competition from Maruti Udyog’s SX4, he said: “Competition is always welcome as it expands the market and is good for consumers. But our customers are different, they are smart to make their own choices."

HSCI had witnessed a 12.82 per cent sales decline in August at 4,469 units as against 5,126 units in the same month a year ago.

Takedagawa said the company’s production was hit by the on going expansion at its greater Noida facility. Honda Siel India would also be shutting the plant for ten days in November.

The company is expanding its production capacity to one lakh units per annum from the present 60,000 units.

The company was eyeing about 17% sales growth in the fiscal at about 70,000 units as against 60,000 units in the previous year, Takedagawa said.

Asked about the company’s plans for bringing diesel engine cars in India, he said: “Globally Honda has only one diesel engine, which is 2.2 lts in Europe and importing it would be an expensive proposition." He, however, hinted that in future the company may look at the option.

“In India average distance clocked by a customer is about 18,000 km annually, while in Europe where road conditions are good, it is about 30,000 km. But infrastructure in India is also improving and customers may eventually enjoy diesel technology," he said.

Commenting on the company’s hybrid technology initiatives, he said HSCI was working on developing homologation standards.

“There is no homologation standard for hybrid vehicles in India. We are developing on our own here and at the same time we are also working with SIAM to initiate a dialogue with the government for the same," Takedagawa added.

He said while the company had no immediate plans to bring hybrid vehicles, which are produced only in Japan, to India. Even if it was brought it would only be for technology demonstration and not for big volumes business, he said.

On the initiative to bring spare parts sourcing business of Honda’s various subsidiaries in India under the umbrella of Honda Motor India (HMI), Takedagawa said Honda Siel Power Products will also become a part of it by October. Already HSCI’s spare parts sourcing business has been transferred to HMI.

“But for Honda Motorcycle and Scooter India and Hero Honda, we have taxation issue as they are based in Haryana. Unless we address the issue it cannot be brought under HMI," he added.