Honda may launch Civic, Accord models

Honda may launch Civic, Accord models
ENS ECONOMIC BUREAU

NEW DELHI, MAR 29: Auto major Honda Siel Cars India is considering the Civic, Accord, CRV and Oddessy for a possible launch in the market. Honda has initiated a study of these models to decide whether they should manufacture the model at its plant here or go in for imports.

Honda Siel Cars India (HSCI), president and CEO, T Fujisaki, said here on Wednesday, "we have to see the volumes and the competition in the segment before taking a decision". The company is considering launch of the models in the upper end of the mid-size segment and the multi-utility segment.

"We are also open to import Honda cars from Japan but a final decision would be taken only after removal of quantitative restrictions under the WTO regime," he said. The company may go in for some imports of its popular luxury sedan Accord, another mid-sized car Civic and a multi-utility vehicle CRV next year.

Honda Siel had earlier approached the government for importing cars as completely built units (CBUs) which was rejected by the Foreign Investment Promotion Board. The Indian partner, Siddharth Shriram promoted SIEL, can buy back its 15 per cent equity stake by October 2000. At present, the Indian partner has a 5 per cent stake in the venture.

Honda Siel Cars will end the year with sales of around 10,000 cars, the same figure as the previous year. It has set a target of 12,000 units in 2000-2001. He ruled out the launch of a small car, saying that the segment was already crowded and it was difficult for the company to compete in the price-sensitive small car segment as its main focus was to maintain quality.

Fujisaki was speaking on the sidelines of a conference which announced Honda's entry in the Formula One circuit after seven years. It is joining forces with British American Racing (BAR) to form a new alliance which will be known as `British American Racing Honda'. The BAR is a fledgling Formula One team, established under the sponsorship of British American Tobacco (BAT), world's second largest cigarette company.

Honda plans to promote motor sports in India as well. HSCI may break even with sales of around 13,000 units, Fujisaki said.

Due to "competition from new entrants and less than expected growth of the auto market," Honda Siel Cars will not be able to realise this fiscal's target of selling 11,000 units of Honda City and will not break-even before 2001-2002, officials said.

The company would be able to sell only 9,600 cars this fiscal, which is slightly higher than around 9,400 vehicles sold last fiscal, Fujisaki said. The target set for the next fiscal is 12,000 units, which even if realised will not enable the company to break-even. For break-even, HSCIL should sell around 15,000 cars in a year, which could be possible only during 2001-2002, company general manager marketing Ananda Mohan Gupta said.

While new entrants like accent of Hyundai Motors India Limtied and Ikon of ford India limited have made a dent into Honda city's market, fierce competition will lead to better showing of HSCIL's vehicle in the coming years, Gupta claimed.