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Honda Cars hit a new road

Published: 19th August 2012 12:00 AM  |   Last Updated: 17th August 2012 12:12 PM   |  A+A-

Honda-Cars

After depleting sales and a very stiff competition, Honda Cars India has decided to get more aggressive and wish to regain its status as the most preferred city car brand in India. Ammar Alvi has more.

Recently Honda Siel Cars India (HSCI) announced that the two partners of the joint venture—Honda Motor Co., Ltd. Japan and Usha International Ltd (UIL)—have signed an agreement on complete divestment by UIL from HSCI. The two partners have been discussing the most appropriate business framework for future business expansion plans and their own priorities. UIL, which held 3.16 per cent shares in HSCI, had shown an interest in divesting from the joint venture to be able to focus and strategically invest to expand their own core business. Therefore, based on the mutual consent, UIL has sold its shares to the partner Honda Motor Co.

This decision will give Honda Cars India (HCI) more leverage and independence to take decisions and invest 100 per cent in any manner it wishes. Commenting on the development, Hironori Kanayama, President & CEO, HSCI, said, “We have shared a very successful and fruitful relationship with UIL over the past 17 years. I would like to take this opportunity to express my appreciation for Mr. Siddharth Shriram’s contributions to HSCI and wish UIL a bright future.”

HSCI will now be a 100 per cent Honda subsidiary in India. The process of changing the company name and other formalities will be completed over the next few months.  Honda Siel Cars India Ltd (HSCI) was established in December 1995 to provide Honda’s latest passenger car models and technologies, to the Indian customers. HSCI, now HCI, has two state-of-the-art manufacturing facilities at Greater Noida (UP) and Tapukara (Rajasthan).

Besides this, the company is also contemplating to pull the plugs on its executive saloon Civic due to plunging sales of its model due to stiff competition it has been facing from its diesel powered contemporaries. The company will, of course, do this when it has the right replacement model and also when it is ready to bring in its diesel engine technology into India, something which the parent company has been working hard for years.

At this moment the Honda City and its small car Brio is doing decent and raking in some numbers. But the Accord, Civic and the CRV have no big takers and the company is now seriously thinking how soon it can bring in its new diesel range of cars.

However what is very clear is that when it does bring in those models, expect Honda to take the competition the same way the competition is taking it now.



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