Localisation push: Honda to develop nextgen Brio in India

The next-generation Brio is codenamed I-S-R and is slated to be launched in 2017. Subsequently, Honda will locally develop next-generation models of the Amaze, Mobilio and an upcoming compact SUV, all of which are built on the Brio platform. Currently, Honda designs and develops its products in Japan and supporting development takes place in Thailand. Now, to facilitate this local development strategy, Honda Genbetsu plans to hire 300 people once the facility is ready. But why is Honda moving towards this local development strategy in India? Japanese automakers are not comfortable with local subsidiaries managing product development. But with India becoming a priority market for most, local development is the need of the hour. Honda India's car sales multiplied 2.5 times over the past 3 fiscals, with double digit growth year-on-year. To sustain this growth momentum in the future, experts say Honda sees the need to develop highly localised, India-centric, volume products for which Indian designing capabilities are optimal.

This would also bring huge cost savings to the company. This is a similar to the statregy adopted by rival and market leader Maruti Suzuki, which is building its R&D base at Rohtak at a cost of Rs 3,000 crore. For parent Suzuki, India is its largest global market. Reacting to a CNBC TV-18 query, a Honda spokesperson said: Honda has been focussing on localisation in each market and our R&D function in India - HGID is focused on localisation and cost down activities. We will further expand and strengthen R&D operation towards more India oriented products and their development in coming years.