New Delhi: With a renewed effort in the Indian market, Japanese automaker Honda Cars India on Tuesday showcased its new model Elevate in the mid-size Sports Utility Vehicle (SUV) segment.
“We have a robust product strategy to strengthen our premium play in the market and Elevate is the first model among the 5 new SUVs that will be launched by Honda in India by 2030. Currently, the share of sedans is at 10% of the Indian passenger vehicle (PV) market and SUVs take up about 40%. With Elevate, we will be a part of the 50% of the overall market now,” Takuya Tsumura, President & CEO, Honda Cars India said.
“We are confident that the Elevate will further strengthen the bond with our esteemed customers and soon become our strong third pillar of business,” he said.
The company, which currently sells the Amaze and City (petrol, hybrid) sedans, had discontinued the production of other models including the Jazz, WR-V and 4th-gen City owing to BS-VI Phase-II norms which came into being from April 2023. Earlier, Honda also offered models like BR-V, CRV, WR-V in the UV segment but eventually discontinued them over the years.
The company clarified that it has no plans of entering the diesel segment now and not looking at hydrogen as a fuel. The maker of City sedan said that the parent company Honda Motor Company has set a target of achieving two-third of its vehicle sales from EVs and the India strategy will also be aligned with the global plan.
Honda also expressed affirmation about exploring the potential of bringing premium models via the Completely Built Units (CBU) as well as Completely Knocked Down (CKD) route to India.
Growth Strategy
Back in FY19, Honda grabbed about 5% market share which eventually slipped to 3.7% in FY2020 and now hovers around 2%. One of the reasons for the significant drop in the market share may also be attributed to the lack of SUV models in the portfolio. The UV segment currently garners over 50% over the Indian PV industry and within this, the SUVs contribute to about 43%.
The company had been facing a tough time since 2018 and the struggle further worsened after the Covid-19 pandemic. In 2020, the carmaker initiated three rounds of Voluntary Retirement Scheme (VRS) which resulted in several key functionaries leaving the company. This was followed by the shut down of its oldest factory in Greater Noida, Uttar Pradesh owing to the falling demand and failure in utilising the maximum production capacity.
However, the carmaker is committed to the India growth story and after two consecutive years of loss making, it has been profitable in the country for FY22 and FY23.
The new Elevate SUV has been developed by Honda R&D Asia Pacific center located in Thailand. It comes with a 1.5L i-VTEC DOHC petrol engine, which churns out 121PS of power and 145 Nm of maximum torque. It is mated to a 6 speed (MT) Manual Transmission and 7-speed CVT (Continuously Variable Transmission).
Honda will also offer its Sensing ADAS offering in the Elevate, with features including collision mitigation braking system, lane departure warning, adaptive cruise control, lane keep assist, road departure warning and automatic high beam assist. The company will open the bookings for the new SUV in July and launch it during the festive season.
In the industry, Hyundai’s Creta is the market leader in the mid-size SUV segment. Besides, Kia sells the Seltos, Maruti Suzuki offers the Grand Vitara, Toyota Urban Cruiser Hyryder, Volkswagen Taigun, Skoda Kushaq, amongst others. The success of Elevate SUV is crucial for the company to garner interest of the consumers in the fast growing SUV segment.
Honda rolls out vehicles from the Tapukara plant in Rajasthan, which has a production capacity of 1.8 lakh units and can be expanded to 2 lakh units. Tsumura said that until FY23, the company produced 540 units per day, which has now gone up to 660 units production per day.
India to be the export hub
Globally unveiled in India, Honda plans to export the Elevate to several markets globally. “While India will be a leading market for Elevate, it will also be the key export hub for the model in the future,” Tsumura said.
During the last two years, the Japanese carmaker has significantly increased its exports and marked a year-on-year growth of 17% in FY23.
Toshio Kuwahara, Head of Regional Unit (Asia & Oceania), Honda Motor Co., Ltd. and President and CEO, Asian Honda Motor Co., Ltd. said, “India being the world’s third largest automotive market is extremely important for Honda. The exports from India to several regions across the globe are growing continuously every year. With high level of quality standards to deliver products that exceed expectations of both local and worldwide customers, India has become one of the most important export hubs for Honda.”
The company aims to be carbon neutral by 2040. For this, 100% sales across the globe, including India will come from BEVs and fuel cell EVs.
