Worldwide, Honda has a proven track record in generating models that fire the imagination of the young. This goes way beyond what most Indian consumers can conceive of. For instance, a car-truck hybrid for drivers in their early twenties is one such creation that was put out as a concept at the international car show in Detroit last month. It was an instant success.

Even as other car manufacturers have been caught in the rough and tumble of technological and financial controversies, Honda has been hard at work, head down, at a safe distance from the headlines. Now, it is making its own kind of news for having spent this time focussed on better technology, improved production processes and an array of models that can keep customers coming back for something more exciting. Civic and Accord remain hugely popular for the steady performance that they offer. But, that is just a part of the Honda mystique. It is the zippier creations that keep the company on the frontiers of the auto business.

The City came to India with elementary strengths. Good mileage. Easy handling. Smart looks. Adequate interiors. Ample space within. It came with the Honda name in a market that was widely familiar with the company, but had not directly sampled its products. The City provided a completely different kind of driving experience. In Delhi, it was perfectly suited to the agonising stop-and-start routine of the crowded metropolitan core and the rapid change in pace that one experiences in the vast open avenues of the planned areas. It also had the economy and sturdiness needed for long drives if you happened to be living outside of metropolitan limits such as in Gurgaon or Noida.

Owners of the City were thrilled by the car's quick responses. They had not experienced such performance before, nor the handling comfort. The VTEC model now carries all this further. The new technology permits peak performance in varying conditions. So, in the midst of metro core chaos, the City VTEC gives you low-fuel consumption with sharp bursts of power. But, move out on to the highway and the engine provides you with the more sustained high speeds needed for keeping up with that kind of traffic.

In 1984, Honda ate its heart out when Suzuki managed to get both a car and a mobike project in India. Honda's own car proposal had been turned down by the government. Then came the deal with Hero and India's first four-stroke mobike and a scooter project with the Firodias. The car business came much later.

Honda Siel Cars India Ltd was set up at the end of 1995. The City model was launched in 1997. The VTEC engine in the City 1.5 came in August last year. There are 22 dealers in 17 cities.

Honda's Indian graph has been climbing all the way. Figures for January showed that the City had sold 850 units, which was a 17 per cent increase over the 728 units sold in December. Sales for April 2000 to January 2001 were 8,087 cars, a 9.5 per cent increase over the same period in the previous year.

Honda has a pricing problem with its City. Most customers feel it is a good car, but it is too expensive. The price has Honda in a fix as well. The company was hoping to spread out its offerings by beginning with the City 1.3 well below the Rs 7 lakh-mark and climb all the way through the City 1.5 VTEC right upto the Accord which it will soon launch. This has not happened.

The 1.3 City remains above Rs 7 lakh for a variety of reasons and all Honda's models remain bunched together at the high end of the market. A high price takes a toll on numbers, but Honda says it can live with that.

For the next few years, it would be happy to focus on quality and building its brand image. It would be satisfied if in the mind of the Indian car buyer Honda is associated with superior technology and reliability. Service is another area it would like to score in in a sustained manner.Honda executives admit that the Koreans have an edge in aggressive hardsell.

But, they have met that challenge in other markets as well. The Koreans, as they see it, take huge strides quickly only to find that they have overreached themselves. This is not untrue of the Indian situation. Hyundai, for instance, is selling much faster than it can service and Daewoo's collapse tells its own story.

Internationally, Honda has insisted on staying ahead without cheap finance and discounts. It is the same case in India. Buyers of its cars, Honda executives say, mostly do not need attractive finance packages. They can pay up front.

Obviously, there is a need for growing the market and creating a broader base for Honda cars. The company realises that it will have to improve its presence by putting out smaller and cheaper models. But that will depend on how the economy moves. It is only sustained growth with vast improvements in infrastructure which can support a substantial increase in volumes. Much remains lacking in the Indian scenario, some of it as basic as good roads and unadulterated fuel.

For now, Honda is happy to be in India and occupying as much mindspace as it does road space. Most certainly, Honda is even happier to see its own gains come at a time when a bruised and battered Suzuki is losing some of the early advantage it has been flaunting.