In India, Honda has largely remained absent from the mass-market SUV segment despite the company’s presence in the hatchback, sedan, and crossover segments. Although it has always maintained a low profile when it comes to its SUV strategy, it has now confirmed that it is entering the space with a bespoke product in the coming years. Honda Cars India’s senior vice president and director of sales and marketing, Rajesh Goel, told, “We have developed a brand-new SUV that is aimed at India.”
Honda enters the SUV market
Due to the rapid growth of the SUV market, Honda has been losing market share in a country where sedans have traditionally been a strong point. During the first seven months of this year, the shift toward SUVs has been accelerated. According to statistics, SUV sales increased by 34 percent from July 2017 to July 2021. The pace of technological advancement continues to accelerate and sedan sales are losing ground. “The percentage share of sedans has decreased in every segment,” said Goel. In that sense, Honda is finally making its move in the highly lucrative SUV market, which has been slow going until now.
Goel made it clear that Honda’s upcoming SUV will be a new model and tailored towards the Indian market, despite being tight-lipped about other details. Therefore, we can expect the model to debut first in India and be a model that Honda has never released in other markets. As a result, it is likely that the model will be shared with other markets as well since India’s projected volumes cannot justify the development of an entirely new product.
City platform to be used by Honda in its SUV
While official details on the upcoming product are scarce, Honda has already been developing an SUV using the City platform earlier this year. The vehicle will be 4.3 metres long and will compete against vehicles such as the Hyundai Creta, the Kia Seltos, the Skoda Kushaq and the Volkswagen Taigun. The Honda N7X concept SUV has also been revealed recently in Indonesia, and it is possible that this midsize SUV will be related to the production version. Over 90 per cent of the SUV’s components are set to be localized, including its engines, which are two 1.5-litre petrol engines and one 1.5-litre diesel, as well as its auto transmission. Indian users should be able to purchase it sometime after September 2023.
The S-SUV is internally known as the 31XA (code: 31XA) and comes in two editions, two-row and three-row layouts. Honda SUVs could, then, even compete with Tata Safari, MG Hector Plus, Hyundai Alcazar, and Mahindra XUV700. A trademark for “Elevate” has also been registered in India by Honda, which provides a hint at the SUV’s nameplate.
Restructuring Honda India’s Operations
Honda has realigned its India businesses in conjunction with its shift in SUV strategy. Last year, the Japanese automaker closed its Greater Noida plant and founded its single production base in India at Tapukara in Rajasthan. Goel said that his company is on track to becoming a thinner, more solid company. By consolidating manufacturing operations, Honda was able to improve capacity utilization from 30% with 2 plants to 70% with one facility.
The Amaze, which is currently the company’s most important model in India, just had its facelift. It sold 40,778 units in FY2021, making it just behind the Maruti Suzuki Dzire as the second most popular compact sedan. Goel explains that Amaze contributes most of our volumes, accounting for almost 40-50%.
Honda’s Indian operations are also centred in the City. The company began exporting the LHD version of the sedan from India in early 2021, after launching the fifth-generation model last year. We expect City exports to be four times as large as they were last year under the LHD model. Mexico and Turkey are likely to be among the countries we export to,” said Honda’s senior executive.
A mainstream hybrid vehicle is still on the way to our shores, in the form of a City hybrid – a plan that has been delayed due to COVID-19. Goel reported that the hybrid (City) will be launched within the next financial year.