NEW DELHI: Owing to current slowdown faced by the auto industry and challenging times ahead, India’s number two two-wheeler maker Honda (HMSI) said it would reconsider its future investments in the Indian market. This decision, however, would not impact its on-going expansion at Gujarat factory where it is setting up of a new production line at an investment of Rs 630 crore.
“The slowdown and transition towards the newer norms had put pressure on everyone. New investments for capacity depend on the roadmap for the electric vehicles by the government. Additional investment to increase our capacity is under consideration at present,” said Minoru Kato, President and CEO, HMSI at the sidelines of Honda’s first BS-VI scooter launch- the Activa 125.
The scooter which comes with many firsts in the segment will be 10-15 per cent expensive and will go on sale by the end of second quarter of this fiscal. Kato said that the auto industry will continue to face pressure in the coming months, but there is a possibility of a revival in the second half of the year. “Festive buying and pre-BSVI buying will drive sales post the month of September. H2 of this fiscal will be better than H2 of last fiscal,” Kato said, adding that it will be a tough challenge for automakers to ensure there is no inventory left of BS-IV complaint vehicles on April 1, 2020 when the new emission norms kick in. Honda also joined other automakers in opposing the government’s proposal of allowing sale of only battery powered two-wheelers below 150cc by 2025. As per the proposal, all petrol-powered two-wheelers less 150cc will have to be phased out by 2025.
When asked about plans to launch electric vehicles, Kato said they are yet to decide. The automaker will have no EVs in India at least till 2020, but would rather focus on grabbing market share in the 125 cc plus scooter segment and premium motorcycle segment.