Honda to bring out small car for India

By siliconindia   |   Wednesday, 10 January 2007, 18:30 IST
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NEW DELHI: Japan's Honda Motor Co is developing a premium hatchback, attuned to Indian needs, which would be launched in the next 2-3 years. "It will not be from our existing models. Our plans are to provide the latest global-technology models and this car will most likely be launched in the next 2-3 years," said Masahiro Takedagawa, President and CEO of Honda's Indian Joint Venture Honda Siel Cars India (HSCI). Asked whether the car was being specially developed for the Indian market, he said, "India will be the lead country, though the car will also be sold in other markets. However, we will consider Indian infrastructure and localization plans while developing it." Honda's Global President and CEO Takeo Fukui had recently said, in Tokyo that the company would launch a small car in India in the coming years as it eyes sales of 1.5 lakh units by 2010. Takedagawa said the company, which currently manufactures cars at its Greater Noida facility in Uttar Pradesh, would be setting up a second plant in India, which will see it invest $200 million (around Rs 900 crore) that will be met through internal accruals of the cash-rich subsidiary. The company, which expects turnover to rise to Rs 5,000 crore this fiscal against Rs 3,000 crore in 2005-06, is believed to have zeroed in on Rajasthan for the new plant where, along with ancillaries, it will invest a total of Rs 2,000 crore. Honda, which sells models like sedans 'City', 'Civic' and 'Accord', is expanding capacity at its Greater Noida plant to 1,00,000 units by 2007, while the new plant will have a installed production capacity of 2,50,000 units, though the company will start with 50,000 units. Honda, which sold 43,000 cars in India last fiscal, hopes to touch 60,000 units in 2006-07. The company on Tuesday unveiled an upgraded version of the luxury sedan Accord. Available in three variants, the base version has been priced at Rs 14.92 lakh, while the top-end at Rs 17.32 (both ex-showroom Delhi), a premium of about Rs 38,000 over the price of the earlier Accord. "We expect to sell around 300 units of the Accord monthly," Takedagawa said. The company said, India was an important market for Honda and it will continuously upgrade its models in the coming years. Company Vice-President and Director N K Goila said Honda had been making net profit in India over the last five years, and it was Rs 220 crore in 2005-06. He said, sales in the 2007-08 fiscal were expected to be around 70,000-75,000 units as the company would also augment its dealer network in the market.