The Japanese automaker is getting ready to introduce its first genuine SUV produced in India next year, which it thinks will help turn around its market fortunes. Due to a lack of SUVs in its lineup, the company’s market share has dropped to under 3%, forcing it to close its oldest manufacturing in Greater Noida in 2020.
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Honda India to close its doors?
By December 2022, the automaker will likewise cease domestic production and sales of the 4th Generation Honda City. However, a person with knowledge of the situation informed ETAuto that the fifth version of the car would still be sold.
How is Honda faring in India?
Honda was a dominant force in the Indian auto market less than ten years ago. Compared to industry leaders Maruti Suzuki and Hyundai Motor, its line-up of just four models was modest, but each of those four—the City, Civic, CR-V, and Accord—was a market leader in its own category. The Civic was the top-ranked premier sedan, the CR-V dominated the premium SUV market, and the Accord was performing well in the luxury executive saloon segment. The City had established itself as a coming-of-age sedan. According to Amit Kaushik, the CEO of Urban Science’s transnational consulting firm in India, “Honda was the best example of a good launch among carmakers in India.” It created an entry that anyone could be proud of.
Its brilliant entrance today stands in stark contrast. There are now ten Honda models available in India, however none of them are market leaders. The first four products of competing companies have been surpassed, but none of the succeeding Honda launches have met expectations. The high-end hatchback Jazz was unable to gain traction. Brio, a compact vehicle, was a non-starter. Amaze, a small car, got off to a good start but has since fizzled, with sales down 38% in 2016–17 from the previous year. Both the compact SUV BR-V and the MPV Mobilio have been utter failures. Its most recent product, the WR-V, a stylized variation of the Jazz that was released in March of this year, is still up for debate.
What happened? Honda had a solid reputation for producing high-quality, fashionable, technologically advanced items that allowed it to command a premium over rivals. How did it waste the initial goodwill? Will it be able to recover?
The Indian auto industry was still in its infancy when Honda entered the country in 1997, working in cooperation with Siddharth Sriram of Usha International Ltd. Because of the lack of competition and public sector ownership of the market leader Maruti, cars were still considered a luxury. Honda also had no plans to compete against Maruti in the compact car market, which belonged to the latter. It sought to carve out a distinct niche for itself in the premium market and envelop its goods in an aura of desire.
In order to do this, Honda introduced goods that were successful overseas but also suitable for Indian conditions. (Internationally, popular models may not always function in India, as corporations like GM and Ford have regrettably discovered.) However, Thailand, whose conditions, particularly the tropical temperature, are comparable to those in India, was also used to build the first-generation Honda City, which was released in 1998. Despite the high price, the City sold 8,258 units in its first year of sales, which was a huge success. More full-sized sedans than any other have been sold in India to date—671,000 vehicles total.
Honda is closing its facility; why?
According to Nikkei Asia, Honda is taking a significant step toward switching to electricity by closing the Sayama manufacturing facility. Given that the majority of Honda’s models are currently built abroad, it also forms part of the company’s objective to lower production costs. Within the next two to three years, the facility will cease all operations while continuing to produce replacement components.
Honda hopes to have a complete EV lineup by 2040 along with a few FCEV models like the Honda Clarity, which now also comes in a hydrogen variant, despite not yet having a global EV platform. Around 2025 is when Honda plans to launch its first worldwide EV platform, but in the interim, we will receive one Honda and one Acura EV, with the latter being a Cadillac Lyriq rebadged. Both EVs will be produced at GM’s Mexico facility, which has been modified to produce EVs.
How come Toyota left India?
Toyota has mostly shifted its focus toward hybrid vehicles in India, which are subject to tariffs that can reach 43% because they are not entirely electric.
One of the largest automakers in the world, Toyota, started doing business in India in 1997.
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A setback for Prime Minister Narendra Modi, who is trying to entice international corporations to counter the severe economic malaise brought on by the coronavirus pandemic, is Toyota Motor Corp.’s decision not to develop further in India due to the high tax structure of the country.
People with knowledge of the situation stated last week that India intends to provide incentives totaling $23 billion to entice businesses to establish manufacturing, including production-related breaks for automakers. The fourth-largest automobile market in the world is located in South Asia, but foreign companies have had difficulty competing in a market dominated by low-cost fossil-fueled automobiles.
Ford left India for what reasons?
In NEW DELHI: Within three months of revealing an unexpected willingness to reconsider its India exit strategy, American auto giant Ford announced that it was abandoning its plan to produce electric vehicles in the nation (for exports), despite having qualified for benefits under the prestigious government production-linked incentive (PLI) program. The corporation is reportedly close to closing negotiations to sell both of its Indian factories—the first is in Chennai, Tamil Nadu, and the second is in Sanand, Gujarat. The Gujarat facility is reportedly close to being acquired by Tata Motors, which has experienced a significant recovery in its India passenger vehicle industry. Meanwhile, talks are ongoing with a number of companies for Chennai, including Ola, sources claimed. The business, which in February of this year expressed optimism about returning to India after first leaving in the middle of 2021 (when it was unable to arrange a joint venture with a local company named Mahindra & Mahindra), is believed to have notified its staff of the most recent decision.
A Ford spokeswoman in India responded to inquiries with the following statement: “Following careful consideration, we have decided to no longer pursue EV manufacturing for export from any of the Indian plants.” We will always be grateful to the (Indian) government for granting our request under the Production-Linked Incentives program and for providing assistance as we carried out our research. The spokesperson stated that Ford had continued to investigate potential alternatives for its manufacturing facilities as part of the ongoing business restructuring in India, one of which had included applying for the PLI scheme that would have allowed it to use its plants as a potential EV manufacturing base. The business stated that as of right now, its previously announced business restructuring is proceeding according to schedule, including looking into alternate uses for our production facilities.
According to the spokesman, we continue to collaborate closely with unions and other stakeholders to develop a fair and well-rounded plan to lessen the effects of restructuring. According to sources, the corporation found it challenging to establish an EV manufacturing facility focused on exports in India while ignoring the local market. Ford decided it would be best to avoid local manufacture in the market going forward after having a negative experience with India in the past. One of the sources said that selling the factories to interested parties seemed to be a better option because they are still in good condition in contrast to the General Motors factory in Maharashtra, whose sale to China’s Great Wall Motors has been delayed because of diplomatic and border tensions between India and China. Ford customers will continue to receive service and support for replacement parts in the market, according to company executives, even though local production plans are being abandoned.
Honda’s failure in India: Why?
One of many vehicle fans’ favorites is at the top of the list. It is a vehicle that has been sold in markets around the world for 54 years, spanning 10 generations, of which 4 were introduced in India. The Accord, the most stolen vehicle in the world, was initially well-liked in India, but Honda raised prices with each iteration to the point that the final model marketed here made no financial sense at all. It was eventually cancelled after finding no buyers.
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Why do Indians buy Honda vehicles?
Honda claims that they aim for a quality level of 120% when building their vehicles. For them, it is intolerable if even one out of 10,000 or 20,000 customers receives a subpar or damaged product. Honda merely aims for dependability. Honda vehicles are renowned for their excellent construction and dependable operation. Some vehicles have a limited lifespan after which they become worthless. However, this period seems to have no bounds for Honda automobiles.
Why are Honda automobiles not popular in India?
However, industry observers claim that Honda’s development in India has been hindered by its failure to react fast to shifting market circumstances. Honda has reacted more slowly than its competitors, whether it was about converting from diesel-powered vehicles to petrol-powered ones or catering to customer preferences.
Will Honda close its doors?
For more than 20 years, Honda cars have been on Indian roads. It currently sells cars in a variety of market sectors. Initially, the business exclusively produced petrol-powered models; however, Honda cars are now also available with diesel engines. In 2021, HCIL shuttered its facility in Greater Noida. At now, it produces automobiles in Rajasthan’s Tapukara. There have been multiple recent speculations that Honda Cars India is ceasing manufacture there and working with OEMs to offer the Tapukara platform as well. The company has now addressed these claims and made it clear that it has no such plans.
Honda’s auto production will it end?
In accordance with its future strategy, the corporation is retooling its manufacturing operations. It has declared that by 2040, all of its vehicle offerings would be electric.
Toyota is it leaving India?
“According to Viswanathan, the message we are receiving after coming here and spending money is that we don’t want you. When no changes are made, “We won’t leave India, but we also won’t expand. One of the largest automakers in the world, Toyota, started doing business in India in 1997.
Why do auto manufacturers leave India?
This decline was caused by: Demonetization. a sudden increase in the cost of vehicles as a result of increases in costs and fees at numerous stages, including registration, etc. GST (around 28 percent GST is levied on automobiles).
Toyota is leaving India, right?
Since making just 237 vehicles in April of this year, Motor, the Indian division of the Japanese automaker, has not built a single Yaris.
“Toyota Kirloskar Motor announced the Yaris will no longer be sold in India as of September 27, 2021. The business said in a statement that this action is a part of Toyota’s product strategy to continue to meet the customer’s ever-changing needs through improved technologies and product offerings.
For the following ten years, the business promised to provide spare parts to Yaris buyers.
Mid-size sedans are a highly competitive market sector in which the Yaris was first introduced. Almost all Indian mass-market automakers, including the market leader, have a product in this category.