Honda Motor Company planning new small car for India: CEO Takahiro Hachigo

Japanese automaker Honda Motor Company is considering a new small car for India after Brio and Jazz helped it gain just a minor share of the segment in its fourth largest market in the world. The company’s Indian subsidiary is preparing to develop at the new research and development centre a car attuned to domestic demands, chief executive Takahiro Hachigo said on the sidelines of the Tokyo Motor Show. He said Honda will work on increasing development capability in India and making cars that people like. Edited excerpts from a conversation with ET and select Indian journalists:

What is Honda’s primary focus, to increase sales or develop more innovative products?

Takahiro Hachigo: We want to become a company where we combine our customers’ dreams with our dreams to come out with outstanding products. Yesterday, at the Tokyo Motor Show, we announced FCV, Civic Type R, NSX-R, which will make our customers happy. We should place top priority on coming up with such exciting products. If we offer good products, it will result in good volume sales. Therefore, our number one priority will be to make good products.

Will your Indian subsidiary play an important role in developing new products?

Takahiro Hachigo: We believe we are going to work on increasing the development capability in India. Honda globally wants to enhance its six regional operations. We would like to see that each region becomes capable of doing its own development, procurement, production and sales. Therefore, In India we would like to enhance these functions.

Will you make India an exports hub?

Takahiro Hachigo: Already India is a growing export hub for our components, which we export worldwide. And in small volumes, we are exporting small cars to South Africa and other Asian nations. We believe that if we can increase competitiveness of the finished cars produced from India, then there is ample room for exports from India to grow. I believe Mr (Katsushi) Inoue (the head of Indian operations), will be the key person to ensure that finished cars produced in India gain such competitiveness.

What is your vision for the Indian market and volume expectation by 2020?

Takahiro Hachigo: India is a big country with a large population. I believe motorisation will grow significantly. As for 2020, I believe the key will be how many products we can come up that Indian customers will like. If we have competitive products in place, that will determine the volumes. Instead of trying to estimate the volumes, we would like to focus on the products.

Do you feel there is a need to focus more on small cars for India and Southeast Asia?

Takahiro Hachigo: We place some priority on trying to listen to the needs of customers from different regions. If the region is showing strong demand for small cars, we are always seriously considering possibilities. This applies not only to India but to all of Asia. Listening to the demand for small cars, we are thinking of what kind of strategy we need to put in place for this category. Honda will continue to listen closely to the request coming from the market and determine the business direction, so we are seriously contemplating these possibilities now.

Will you consider taking on domestic market leader Maruti Suzuki, which has five or six hatchbacks, compared to Honda’s two models, Brio and Jazz, in this segment?

Takahiro Hachigo: When it comes to line up strategy for respective regions, each of the regions has ownership for the region.

With millions of cars being recalled these days all over the world including India, do you think such actions hamper the brand equity and lead to questions on quality?

Takahiro Hachigo: Regarding quality issues, we believe that quality is of utmost importance for the company and therefore we are placing topmost priority on this quality issue. Therefore, at our R&D centre we are introducing a mechanism to check quality and also at the factory end, the checking mechanism has been strengthened.

(Ketan Thakkar is attending the Tokyo Motor Show, at the invitation of Honda Motor Co)