Can Honda get its mojo back? | Deep Drive Podcast Ep. 18 | Autocar India

Summary

In this episode of the Deep Drive podcast, hosts discuss Honda's journey in the Indian automobile market. They delve into Honda's initial success with the City, its shift towards mass-market vehicles, and the challenges faced with the Brio and BR-V. The conversation highlights Honda's engineering prowess, its struggle to keep pace with market trends, and the potential of the Elevate SUV. They also speculate on Honda's future strategies, including the importance of localization and adapting to Indian consumer preferences.

Takeaways

• 🚗 Honda has a strong brand legacy and is loved by its customers, often being considered a top choice for driving experience and reliability.
• 📉 Despite its loyal fan base, Honda has seen a decline in its market share and brand strength in India, partly due to strategic missteps and late entries into market trends.
• 🛠️ Honda's engineering prowess is evident in its cars' performance and innovation, but this has sometimes conflicted with market demands for practicality and cost-effectiveness.
• 🚗📉 The Honda City has been a significant model for the brand in India, but its evolution has seen shifts from performance to practicality, reflecting Honda's attempts to adapt to market changes.
• 💡 Honda's entry into the small car segment with the Brio was too late and misaligned with the market's shift towards premiumization, leading to a lack of success for the model.
• 🛑 Honda's management changes and lack of continuity in strategy have impacted the brand's direction and ability to keep pace with market demands.
• 🚫 The discontinuation of models like the Civic and CRV in India was a strategic decision to focus on profitability over market share, which has disappointed many Honda enthusiasts.
• 🌐 Honda's focus on exports has been a bright spot, with the Elevate model showing strong export demand, highlighting the potential for India to be an export hub for the company.
• 🔄 The transition to new platforms like the pf2 signifies Honda's commitment to future growth, with plans for electrification and new models that may better align with Indian market needs.
• 🤔 The lack of localization and slow adaptation to market trends, such as the shift towards SUVs and diesel engines, has been a challenge for Honda in maintaining its competitive edge.
• ⏳ Honda's future in India hinges on its ability to quickly adapt to market trends, localize production effectively, and leverage its strengths in engineering and customer loyalty.

Q & A

What was Honda's initial strategy when they entered the Indian market in 1998?

Honda's initial strategy was to launch the Honda City, an Asian car specifically designed for the Indian market, focusing on performance and driving experience, which was different from the global models.

How did Honda's approach to the Indian market change between 2010 and 2020?

During 2010 to 2020, Honda attempted to become a volume player, shifting from a premium brand to a mass-market brand, which resulted in a loss of its premium appeal and a disconnect with the evolving market trends.

What was Honda's first car in India, and how was it received by the market?

Honda's first car in India was the Honda City, launched in 1998. It was well-received for its driving experience and performance, especially its engine, despite its bare-bones interiors.

What was the impact of the Brio's failure on Honda's strategy in India?

The Brio's failure led to Honda losing faith in the Indian market, causing them to miss out on several market cycles and trends, and contributing to a decline in brand strength compared to competitors like Hyundai.

How did Honda's management changes affect the brand's performance in India?

The constant change in top management led to a lack of continuity in strategy and vision, impacting Honda's ability to adapt quickly to market changes and consumer demands.

What was Honda's approach to the compact vehicle segment in India, and why did it not work as expected?

Honda attempted to enter the compact vehicle segment with the Brio, but the platform was compromised and low-cost, leading to poor interior quality and NVH, which customers rejected.

What is Honda's current market share in the Indian passenger car market?

As of the April to June quarter mentioned in the script, Honda's market share in the Indian passenger car market is about 2.5 to 3%.

What is Honda's strategy regarding exports from India, and how has it been beneficial for them?

Honda has been using India as an export hub, with the Elevate model exporting over 50,000 units, which has improved their bottom line and profitability.

What is the significance of the pf2 platform for Honda's future in India?

The pf2 platform is Honda's future platform that is expected to be more electrified and will underpin a range of models, including SUVs and sedans, potentially shifting the center of gravity for Honda's products to India.

What are the challenges Honda faces in the Indian market, and what strategies might they adopt to overcome them?

Honda faces challenges such as a shrinking portfolio, low market share, and being out of sync with market trends. They might overcome these by localizing more models, understanding Indian sensibilities better, and introducing new models that resonate with Indian buyers.

What is the current state of Honda's product lineup in India, and how does it reflect their strategy?

Honda currently has a lean product lineup in India with only three models, reflecting their strategy to focus on profitability and the export market while waiting for the introduction of new models on the pf2 platform.