In another attempt to find its feet in the India market, Japanese carmaker Honda is going to launch an SUV. The product which is likely to be launched in 2023 is going to be made in India but is most likely to be exported to other countries.
“We recognise the customer preference has shifted to SUV. Market share of SUV segment is growing and growing in India. We studied and investigated how to take advantage of this. I can confirm that a new SUV from Honda is under development which is specially designed for the Indian market- this is a brand-new SUV focused only for the India market,” said Gaku Nakanishi, president and CEO of Honda Cars India.
During the past five financial years from FY17 to FY21, the SUV segment has grown 35 per cent, 49 per cent, 33 per cent, 15 per cent, 20 per cent respectively--higher than the overall passenger vehicle segment.
Honda currently has the WR-V as the only product to offer in the compact SUV segment but has failed to become a choice for buyers with its popularity steadily declining. Only 708 WR-V were sold in July as compared to segment leaders like Maruti’s Vitara Brezza and Hyundai’s Venue which sold 12,674 and 8,185 vehicles, respectively.
While Honda didn’t give details on the SUV's size and pricing, industry sources expect that it will be in the mid-SUV segment, where it will compete with the likes of Hyundai’s Creta, MG Motor’s Hector and Kia Motors’ Seltos.
“The compact SUV segment is too cluttered with strong product like Brezza, Venue and the Nexon. So, Honda may want to target the mid-size SUV segment instead of having a competing product against its own WR-V,” an executive of a rival company said.
Last year, Honda in a virtual trimming down of its business, closed one of its two manufacturing plants at Greater Noida and consolidated all its operations at the Tapukara plant in Rajasthan. It also stopped the production of CR-V and Civic- one of its most popular model and also discontinued selling them in India with immediate effect. This left the company with virtually two popular selling models- the City and the Amaze which are leaders in the sedan segment. Nakanishi said that the streamlining of operations at the Tapukara plant is complete which will make Honda a healthier company.
In fact, Honda launched a facelift of the Amaze model with a new front grille and automatic LED projector headlamps. This, the company believes will keep the product as one of the leaders in the sedan segment till it rolls out the new SUV. With sales of 40,778 units in FY2021, it was the second most popular model in the compact sedan category, behind Maruti Suzuki’s Dzire
“Fifty per cent of our sales came from the Amaze. The unique characteristic of Amaze is that in its segment, it has looked one class more premium than its rivals. For the sub-4 metre segment, it gives sedan-like feeling to the customers with a significant section from the tier-2 and tier-3 cities,” said Rajesh Goel, director of sales and marketing.
But Goel very well knows that the City and the Amaze can no longer win the game in India, as the customer trend has shifted towards SUV. The popularity of the SUV segment has dented sales of sedan have almost halved since 2018.
“We see the shift to SUVs has accelerated in the first seven months of this year. Till July 2021, the share of SUVs went up by as much as 34 per cent. So the pace is accelerating and the biggest hit has been taken by sedans, I can’t hide that. The sedan percentage share in each segment is decreasing,” he said.
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