'Indian customers are smart buyers’
Mr Takedagawa outlines Honda's plans for India and the launch of the premium small car, Jazz
By Chanchal Pal Chauhan, ET Bureau |
Honda Siel Cars India president and CEO Masahiro Takedagawa has been managing activities of the Honda group in India and Asia Oceania region for the past three-and-a-half years. Mr Takedagawa outlines Honda���s plans for India and the launch of the premium small car, Jazz. Excerpts:
What technology do you plan to bring with the Jazz?
First of all, Jazz is a sister car of the City that was very well received in the Indian market. The platform of the cars is almost same. However, driveability of Jazz will be different. It will be very sporty. In terms of utility, it offers plenty of legroom and cargo space.
There has been much experimentation with the styling of the Jazz. Will there be many variants of the car?
There will be only one variant initially. It is a different car and will set new standards for the hatchback segment. It���s a shift from our policy for the City and the Civic. Of course, there will be many options for colours. This is to minimise the level of stocks which dealers or suppliers have to keep for several variants.
What is the progress on the diesel version of the City and the Jazz for the Asian market?
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We have around 400 engineers, who are free from F-1 activities to develop small diesel engine, power train as well as next generation hybrid engines. As already announced, a small diesel engine project has been kicked off. We are working on different engine sizes and development could take 2-3 years.What would be your strategy to ensure stable demand for the Jazz?
The market has changed due to the economic slowdown and the depreciation of the rupee. We are achieving above 70% of localisation. The components used in the Jazz are same as in the City. However, the Jazz will benefit from the lower excise duty allowed on small cars. Jazz will give the best fuel efficiency in that segment. We will target those customers who appreciate the drive. Indian customers are smart buyers and they appreciate the value given by Honda.
How are you revamping your distribution and after sales network, particularly outside the metros?
As much as 50% of Honda Siel market is in the NCR and Mumbai. We have 106 dealerships now, compared to 55 when I had joined Honda. We are willing to expand our network in the tier-two and three cities. Also, we plan to start 10 more dealerships this year. We are focusing on the service network since the quality cannot be assured in local service centres.
Honda���s experience with hybrid was mixed. What is the future of hybrid?
We do not regret launching the car (Civic Hybrid) in India. We want the Indian customer to get the experience of the technology; we sold 300 units which is substantial. I was happy to say that once the price of the car was slashed to Rs 13 lakh, over 250 cars were sold in just four days. Bringing a hybrid version as a completely built unit attracts very high import duties. We do not plan to bring in any hybrid car in the near term.
You have postponed work at the Rajasthan plant. The level of localisation at the Greater Noida plant is not high. What is your plan for the next fiscal?
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We were able to stop investment at the right time. The body panel and power train will be supplied to Greater Noida from Rajasthan. Several suppliers have set up their shops at Tapukara, Rajasthan. We will first raise capacity of Greater Noida to one lakh units per year. The City is doing well in the Indian market. We sold over 6,000 units last month, the highest retail sales for City. Jazz will boost our growth. Some of your products have been hurt by the price hike?
Some products are not so competitive in the current scenario. Since the localisation of the City and Civic is high, the price of these cars have not been affected. However, we have changed our policy on our sports utility vehicle, CR-V. We will import CR-V on confirmed orders from dealers. We are currently working on a lean inventory. There will be some cut back on CBU imports.
Is Hero Honda integrated in Honda Motors India?
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Not as yet. However, we are exploring the opportunity of integrating Hero Honda too. But we have synergies with other Honda companies such as the two-wheeler subsidiary Honda Motorcycle and Scooter, Honda Siel Car India and the power equipment company.Download
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