Just two months into office, Honda Siel’s new President and CEO, Mr Hironori Kanayama, has embarked on an ambitious plan for the company.
While export of models such as the Brio hatch is under consideration to utilise vacant capacity, the Japanese carmaker is looking to touch the one million domestic sales milestone by 2015-16.
This would mean addition of 5 lakh more customers in the next four years – a tough task given that it took the company about 15 years (since 1997) to reach a similar number.
“We have a very ambitious plan ahead. We will see significant changes over the next two years. We want to become a household name, just as in the motorcycle business,” Mr Kanayama said, while referring to the success story of sister company, Honda Motorcycle & Scooter.
The sharp focus of Honda in its India car business is underlined by the decision to appointment Mr Kanayama, a company veteran with experience over 19 global markets. He has served as the President of one of Honda’s two Chinese joint ventures and most recently headed the Taiwan subsidiary.
Slowdown, a passing phase
“The vision is to make Honda the best car brand in India in the next five years. We will re-orient our strategies,” Mr Kanayama said, without elaborating on the new plans.
“We’re confident of growth, but we will face some challenges on the way. The industry seems to slowing down, but I’m sure this is just a passing phase,” he added.
Insiders say that a major restructuring within the company’s management may be in the works as well.
To achieve the new targets, Mr Kanayama would need to speed up plans to launch diesel variants, apart from expanding Honda’s portfolio in the mass car segment beyond the Brio hatch.
Asked if Honda would look to increase its model portfolio into new growth segments such as entry sedans or compact SUVs, Mr Kanayama said, “A lot of things are being considered.”
No row with Usha Intl
Mr Kanayama also quelled rumours of a discord with joint venture partner Usha International, calling it like a “marriage” where disputes get resolved on discussions between partners.
Honda Siel would also need to complete utilisation of the 1.2 lakh units a year capacity at its Greater Noida plant. This will help it expand to its second plant at Tapukara, which is lying in wait and where it is incurring expenses on depreciation and maintenance.
Industry analysts see the move as timely, given that Honda Siel has been floundering in the world’s second fastest growing car market – its sales were down 8.5 per cent at 54,427 units in 2011-12.
Apart form a lack of diesel variants, the company’s growth has also been restrained on a severe production constraint on component shortages following the natural disasters in Japan and Thailand last year. With production back on track since February this year, sales have improved with the Brio leading the way.