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Honda in India: New Challenges




Excerpts
Honda In India
New Challenges
In 2011, Honda India started to face new challenges in the form of increased competition for and decreasing sales of all of its models sold in India from 2011. Some of the new competitors who entered the Indian automobile market started to pose stiff competition to the company and overtook it in some product segments where it had been a leader. In 2011, VW’s Vento replaced Honda City as the top selling mid-size sedan in the Indian market within 8 months of its launch..........
Setting The Strategy Right
Some analysts said that the main reason for the decline in the performance if Honda India was its lack of a long-term strategy for a market like India. They said Honda had grown too complacent due to the good performance of its high-end sedans and the brand value it enjoyed in the Indian market. The Indian market was traditionally dominated by small cars due to the low income levels of its population.......
Continuing With The Strategy Shift
In August 2012, Honda completely bought out the stake in Honda India and made it its 100 percent subsidiary. After the stake sale, Honda Siel Cars India Limited was renamed as Honda Cars India Limited. Honda wanted to have total control over its Indian operations to further improve its fortunes in one of the most difficult automobile markets in the world..........
Price Cuts And Other Initiatives
Apart from launching new models, one of the important steps that Honda India took was to drastically reduce the prices of its vehicles in India. It slashed the price of its flagship sedan, Honda City by Rs. 44,000 to Rs. 66,000 (depending upon the model) in June 2011 to compete better in the Indian market. In August 2011, Honda India released a new version of its Honda Jazz which was priced nearly Rs. 150,000 lower than its previous version..........
The Road Ahead
New launches from Honda India started to give good results to the company in 2014 in the form of higher sales and market share. The demand for many of Honda India’s newly launched models like Honda Amaze and Honda Mobilio meant that its plants in India reached their maximum capacity. The demand for many of its models exceeded the expectations of the company and Honda India started second shifts in its manufacturing plants..........
Exhibit
Exhibit I:Classification of Indian Passenger Vehicle Market
Exhibit II: Honda India’s Cars Launched in India
Exhibit III:Models Sold by Honda India in 2014 and Nearest Competitors (Figures in INR Thousands)
Exhibit IV:Chart of Petrol Prices in India from 2002 to 2014 (Prices in the Country’s Capital Delhi)