Honda aims at over 90% localization for future car models

Capitalizing on its brand value in the Indian car market, Japanese car maker Honda has toed the premium pricing line for most of its cars. While a few cars such as the City and the Civic have been successful with Honda following the premium pricing strategy, the car maker was forced to take a re-look at this strategy when the Jazz bombed miserably. 

An aggressive localization strategy followed and once sufficient levels of localization were achieved, Honda cars such as the Jazz hatchback and the City sedan saw hefty price cuts. The price cuts gave these petrol-only cars a shot in the arm with the performance at the hustings improving immediately. 

Honda applied the lessons learnt with the Jazz's high pricing and the car's subsequent failure, on the Brio hatchback. The Brio came with a high level of localization right from word go and the effect of this is visible in the steady sales figures of the least priced Honda car in the country. 

With the pricing of its latest car launch in India, the Amaze compact sedan, Honda took the fight up to market leader Maruti Suzuki's doors. The Amaze, which is the first ever diesel powered Honda car in India, features a localization level that's over 90%. A common thread running across all Honda cars manufactured in India is the high level of localization. 

Honda plans a similar level of localization on its future range of cars for the Indian car market. Over the next couple of years, Honda will launch 4 new car models: the 2014 Jazz hatchback, the all new City sedan, a Brio-based compact MPV and the Jazz-based compact SUV. With a localization level of over 90%, expect highly competitive pricing for these car models. 

The new crop of cars from Honda will come with turbo diesel engines, in addition to the petrol engine options. A high localization level and diesel power, at a competitive price tag, could make Honda cars much more attractive than ever before. Meanwhile, Honda has no plans of bringing the new Civic to India. The C+ segment car was discontinued last year. 

Also, the Japanese car maker has ruled out building an India-only car model. While Honda has launched the Crider sedan, a car that sits between the Civic and the Accord, as a China-only model, such a strategy will not be followed in the Indian car market. All cars that Honda sells in India will be products that are sold in other similar car markets.

Also, Honda isn't looking at launching a sub-Brio small car at this point in time. Although the Japanese car makers makes Kei-cars for the Japanese car market, it is undecided on launching a sub-Brio small car in India. With that, a new small car from Honda isn't the horizon any time too soon.

Source LiveMint Render Courtesy Kodansha-BC