Honda Cars India to focus on quality and be self sufficient

There’s no better time like the present and Honda Cars India can vouch for that. Their new cars, the Amaze and the City, and the diesel engine as well, have transformed their Indian operations. Sales are growing exponentially and there is barely any negative feedback from customers or critics. But why shouldn’t it get even better? Honda has chalked out a very simple strategy to secure its long-term Indian future.

First, the near future. We are all aware that the Mobilio MPV will be launched in the second quarter of this financial year and the new Jazz will join the Honda line-up by the end of FY14-15. These two cars will share the same engines and will draw components from the common parts bin. Economies of scale will help price these products competitively and since they are going to be familiar products due to the similarity with Honda’s existing line-up, risk of a failure is mitigated. But Honda still depends on its parent company to fund a new car project as the Indian operations by itself cannot. 

And that brings us to Honda India’s long-term future. We recently spoke to Hironori Kanayama, President and CEO, Honda Cars India who emphatically said, “All new models after the Jazz and the Mobilio will be raised by Honda India without any monetary assistance from Honda Japan.” Till now he added, “We have required help but we plan to be self-sufficient in the future as Honda India is growing up fast and a grown up cannot depend on its parents.” 

Speaking to us on the increased focus on localization to be cost competitive, Kanayama added that for volumes, Honda required to source locally and this will only increase in the future. “When I took charge of the Indian operations, the Yen was appreciating at a fast pace and so high import content was not an option,” Kanayama stated. 

Growth in the past year has brought forth a welcome challenge for Honda - maintaining its quality standards and customer satisfaction levels. The Japanese giant plans to expand its dealer network in the country by 35 percent to 230 dealerships by end of FY14-15. But Kanayama is aware that the speed of growth could hamper quality in the race to sell more cars. That’s why he wants to focus on maintaining Honda’s quality standards and customer satisfaction levels with every new dealership Honda opens.  

“Our aim is not to climb the list of the highest selling car companies in India. As Honda increases its network and customer base, one focus is on quality and customer satisfaction. The speed at which network is growing, it's a challenge to maintain the level of quality but we will not compromise,” Kanayama concludes.