A tale of two Hondas

The Indian passenger-vehicle and two-wheeler segments are witnessing action heat up, with both Indian and foreign brands intensifying their assault with a range of products that cater to the unique needs of the market. While Honda, which is a trustworthy name in the country, has had a robust past in both the vehicle categories it straddles, the automaker has been facing several challenges, which have slowed its growth in the last decade.

The Japanese automaker is a revered brand in India. The company, which first forayed into the country's two-wheeler segment in 1984 with a JV with the homegrown Hero Group, and tasted success to eventually venture into the passenger vehicle market in 1995 through another JV with the Usha Group, has enjoyed an admirable presence in the world’s largest two-wheeler, and fifth-largest car market, respectively.

While the company successfully earned the trust of the Indian consumer by virtue of its highly-reliable, fun, and technologically-advanced products, making it one of the most sought-after automotive brands, both in the passenger vehicle and two-wheeler segments in the country, Honda's footing has been trembling over the past decade. After its 2010 decision to exit the Hero Honda JV – which had emerged as the top two-wheeler player in the country – and tread its own path to eye larger gains in India’s monstrous two-wheeler market, Honda continues to remain behind Hero MotoCorp, which has been able to maintain a tight grip on India’s entry-level motorcycle segment – a category that still dominates the market.

On the other hand, while reigning the space in people’s minds as the carmaker which would once offer the best of its global products, replete with technology, performance, and safety, to the Indian customer, Honda’s car business lost the plot to its Korean and European rivals, which have aggressively overtaken the Japanese giant by a huge margin, and made it tough for it to regain its once held No. 5 position in 2007. Honda Cars India (HCIL), which could be attributed as the maker of one of the most-celebrated car brands – the Honda City – in the country – is today scrambling to make its mark in the booming SUV segment.

The tale of the two Honda brands in India tells a story where the individual companies are now being seen adopting quite diametrically-opposite business strategies, where, while the two-wheeler arm – Honda Motorcycle and Scooter India (HMSI) – is going all out to offer products across the entire spectrum of the market, HCIL is consolidating its portfolio, and sharpening focus on a handful of product categories. While HMSI has its wings spread out right from the entry-level scooters, and motorcycles, to the mid-size, and flagship, halo products from its global range, HCIL, on the other hand, is learning from its past mistakes, and implementing a consolidation strategy, to renew focus on the growing premium end of the Indian passenger vehicle market, with a near-term strategy of bringing back the Honda magic.

The two Honda Group companies, however, are also leveraging operational synergies, and deploying Honda’s global consolidation measures to go lean, and eye profitability, as they also gear to invest into the mega transition towards electrification. The Indian passenger-vehicle and two-wheeler segments are already witnessing action heating up with several legacy players introducing their EV offerings, Honda, which has been a pioneer in launching environment-friendly propulsion technologies in the country, is yet to dip its toes into the water.

There are huge market expectations from the brand, across the two segments it straddles, and if it can re-energise its portfolios with breakthrough products, Honda’s brand equity could likely suffice its ambitions for the Indian market.

This feature was first published in Autocar Professional's May 1, 2023 issue.

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