Honda Brings Down Curtains On Sub-Brio Car For India

Honda Cars India Limited (HCIL), the 100% carmaking subsidiary of Honda Motor Company, has dropped its plans to develop a car below its Brio hatchback for the Indian market. The decision comes amidst stricter vehicle emission and safety norms which are compelling carmakers to invest heavily in order to be future-ready.  There was a lot of speculation earlier that the Indian arm of the Tokyo-headquartered firm was working on an all-new small car in the range of Rs. 3-4.5 lakh.  Incidentally, Daihatsu Motors-Toyota’s low-cost brand-is leveraging on Datsun’s (by Nissan) suppliers in the domestic market to develop a sub-Etios car for emerging markets including India.

Talking with BW Businessworld, Yoichiro Ueno, President and CEO, HCIL stated, “Brio will remain our entry-level car even when the BS-VI emission norms come into force (by 2020). This speculation (on a car below Brio) was always a speculation which we had never commented on. Moreover, we are known for our premiumness and will never dilute that by launching any car below Rs. 5 lakh at a time when the market dynamics are changing.”

It is to be mentioned that the A-segment market is currently dominated by Maruti Alto (available in 800cc and 1,000cc variants), followed by models like Hyundai Eon, Renault Kwid (available in 800 and 1,000cc variants) and Datsun Go and redi-Go.  Priced in the range of Rs. 2.5-3.5 lakh, it accounts for over 30% of the overall passenger vehicle market and is poised to drop to around 20-22% in the next five years.

“The price of the average car in the Indian market has grown from Rs. 3 lakh a decade back to Rs. 6 lakh now. The consumers are aspirational and are looking to buy a product which can differentiate themselves from others. I think actually nobody wants to associate with anything which is cheap and low in price. The easy finance available and lower rates are also responsible for the shift of consumers’ preferences to upper segments. A further change in the thought process of consumers has also made OEMs think that does India need a small car now. I think Honda’s strategy is just aligned with that and I am not surprised if Honda decides to drop the product in A-segment,” stated Puneet Gupta, Associate Director, I.H.S Markit, a sales forecasting and research firm.