Honda shifts focus to smaller Indian cities to boost car sales

Gaku Nakanishi(L), president of Honda Cars India Ltd., and Rajesh Goel, senior vice president, at a launch event for the latest Honda Civic” in New Delhi on March 7.

By Atul Ranjan

NEW DELHI, NNA – Japan’s Honda Motor Co. is expanding its sales network beyond India’s biggest cities to boost car sales.

Honda Cars India Ltd., one of the leading manufacturers of premium cars in the South Asian country, is opening more sales outlets in smaller cities.

“We are looking to end the current fiscal year with 45 new sales outlets,” most of which are in smaller cities and towns, Shugo Watanabe, Senior staff administrator for marketing & sales of the local subsidiary, told NNA. “This would take our dealership facilities to 380” in total in India.

“Going forward, additional facilities will be added, focusing on tier II and III cities,” he added, referring to cities smaller than the biggest metropolises.

Growth is expected from these cities, Gaku Nakanishi, president of the local unit, said on the sidelines of a launch event for a remodeled Honda Civic sedan in New Delhi last week. “In these areas, we hardly have our sales outlets. So such areas are our focus now.”

India has emerged as Honda’s key market in the Asia/Oceania region, along with Indonesia, Malaysia and Thailand. The region contributed around 15 percent of the automaker’s global car sales in the year to March 2018.

The Indian subsidiary has so far achieved a top position in sales volume terms four times since 2007, having entered the Indian market in 1995, according to Honda Cars India.

“Tier- II and III cities are important markets now as growth in the economy has created wealth in these cities. There are models in the Honda portfolio that will find an audience in these cities,” Deepesh Rathore, automotive analyst of Emerging Markets Automotive Advisors Pvt. Ltd., a consultancy firm, told NNA.

“Also growth in Honda Cars’ network is a confidence booster for existing and would-be customers,” he added.

Honda Cars’ market share stood at around 5 percent in India’s passenger vehicle segment in 2018, which recorded sales of some 3.4 million units, according to Honda and the Society of Indian Automobile Manufacturers.