India is fourth largest market for cars and very important to our overall plan: Yuichi Murata, Honda Cars

Yuichi Murata, Director - Marketing & sales, Honda Cars India Ltd.

It is now the right time for Honda Cars India to restart its future plans, as the company has an India dedicated SUV roll out next year, Yuichi Murata, Director – Marketing & Sales told Moneycontrol in an interview.

Murata believes that the present moment, in fact, is a turning point for Honda in India. The company aims to have a 100 percent portfolio share of BEV (Battery Electric Vehicle) and fuel cell vehicles by  2040. Edited excerpts from the interaction:

Your overall volumes here are small and the expectation from Honda is huge because of its overall reputation and much more is expected in terms of both product roll-out, volumes and new technologies in the subcontinent. Honda's thoughts?

I believe our activities could be greater but of course we have had challenges in the last four years for a few different reasons that include the switch-over from BS IV to BS VI and then of course the market that was impacted by COVID-19. Financially, of course there have also been challenges. That being said, India is the fourth largest market for cars and we see it as having a very bright future and being very important to our overall plan. We have no plans to stop business whatsoever in this country despite the fact that we have taken some hard decisions in the recent past to streamline business and make it more efficient. It is actually now the right time to restart our plans for the future and as you may know we will have an Indian dedicated SUV roll out next year. That will be made for the Indian market and the present moment in fact is a turning point for Honda in India.

You recently launched your e-HEV or hybrid electric Honda City which is a “strong-electric” non-plug-in electric-hybrid car that also runs on petrol. It's a telling statement given that it is not all-electric. Do you feel EVs are a distance from taking off here?

Our plan is to have a 100 percent portfolio share of BEV (Battery Electric Vehicle) and fuel cell vehicles by  2040  and  two-third of percent  of all sales as electrified vehicles by 2030 which will include HEVs (Hybrid electric vehicles) , BEVs, and FCVs (Fuel Cell Vehicles). We introduced the hybrid electric City as a practical choice for customers given that the charging infra is yet to take off and develop fully.

The sedan space is one you  dominated with the City but there’s stiff competition coming from the Volkswagen Groups' VW Virtus as well as its sister brand the Skoda Slavia.  They are also aggressively priced. Any concerns?

The Honda City has continued No. 1 position in the mid size segment with about 44 percent share. We offer diesel, petrol and now Electric Hybrid variants which is quite a diverse range, and one that we think will be substantial for the present time. Our Tapukara plant where capacity is about 180,000 volume, was 105,00 last fiscal and at this point it is primed to take care of demand for the future.

It may not be widely known but as a group, Honda also has multiple other businesses here: Honda Motorcycle & Scooters, as  Honda Generators and Honda private planes and boats. Are there synergies among them?

Yes we always communicate with each other around our corporate direction and they are all in touch. Last year we created a company in Bengaluru called  Honda Power Pack Energy India Pvt Ltd, which will offer battery sharing service for small mobility and has been set up with a view to enhance the synergies that you speak of.

Do you plan to bring in Acura, your luxury badge in India, given that Lexus is here.

At this point we haven’t looked at it but it could be something that we consider it. For now, Acura is only left hand drive so that would have to be taken into consideration and thought through.

What is the big challenge for automobile makers today as you see it?

India is a very complex market and meeting customer demands is one big one. Electrification is another with the government wanting to proceed with it and of course as a car-maker that is something we are moving towards but also for that to happen one needs to have a customer mind-shift,  an environment with the charging infrastructure –– and then to plan for all that to happen is not easy. There are others like the semiconductor shortage as well as strong regulations.

How do you compare the Japanese car-market in context to the Indian market?

There’s a trend of downsizing with people moving to downsizing their vehicles and wanting smaller cars and hybrid vehicles. Eighty percent of customers prefer a hybrid but India of course  that pattern is not there yet. Also, in India there's upward migration with hatch-backs making way for sedans and SUvs along with a demand for automatic transmissions.
The cost of your cars is something customers expect to be lower than what it has been and is greater localisation the answer to that?

The key to higher localization of components is greater volumes and yes we can lower prices if that happens which is what you see with the Amaze and the City. We are of course very very careful that our products must have the strongest durability, quality and reliability. That is our core DNA. That's something that can’t be compromised on. Which is why we offer ten-year anytime warranties on cars which is something no one offers as such.