Honda plans to make India strategic hub for exports

NEW DELHI: With sales in the Indian market under a severe constraint and production capacity grossly under-utilised, Japan’s Honda Cars has decided to make India a strategic hub for exports, making it a key business unit as it plans to begin shipments to left-hand-drive markets in the West for the first time.
The company, which previously refused to focus on exports from India, now sees this as an integral part of its operations, especially as this has the potential to help drive production at its factories at a time when the domestic market doesn’t look so promising for business in the given challenging circumstances.
The new version of the City sedan would be exported to various left-hand-drive markets as part of this initiative, joining the export bandwagon which previously comprised models such as the Amaze entry sedan and WR-V hatch that were being shipped to South Africa and other neighbouring countries, Gaku Nakanishi, president and CEO of Honda Cars India, told TOI.

Honda has an installed capacity of 2.8 lakh units in India, and this is divided between its two factories — the first one at Greater Noida in Uttar Pradesh and the second at Tapukara in Rajasthan.
India passenger vehicle sales of Honda Cars stood at just over 1 lakh units in 2019-20, declining by 44% (industry decline of 18%), while exports were negligible at 3,774 units (shipment turnover of Rs 230 crore), down 21% in volumes, according to numbers provided by Siam.
The company wants to bridge this gap between installed capacity and actual sales through the extra push provided by exports. This is the strategy followed by its Japanese compatriot Nissan in India.
“By the end of this year, Honda India will be adding new export destinations and left-hand-drive markets for the first time ever… While the company’s primary focus continues to be on the domestic market, with this new overseas push, we expect the export volumes to almost double in this financial year,” Nakanishi said. The company also hopes that currency fluctuations can be balanced through such an exercise.

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