So much is the growth potential in India and China that the company is developing another small car exclusively for Asian markets. This car, which will hit Indian roads in next two-three years and would be manufactured at the company’s second plant in Rajasthan, would expand the small car portfolio of Honda Motors that is currently selling Jazz across the globe and the K cars in Japan. However, the company has slight hope of recovery in sales in its traditional markets. “In terms of business planning, we are not predicting an immediate recovery in Honda’s traditional markets to their original levels,” Ito said.

According to Ito, India is a market of great growth potential and the company’s focus would be to increase presence here. “We believe that India is a market with great potential and the company is currently researching on the small car which has to be packaged to meet the requirement of Indian customers and Indian price-point while adhering to the Honda brand,” he said, adding the car would be smaller than the company’s current hatchback, the Jazz, that was launched in June this year.

Honda’s Japan operations are expected to stay in the red though demand has been brisk, helped by generous tax reductions and incentives on hybrids such as its new Insight model.