Exclusive: Honda Motor plans to use India as exports hub for Asian Compact Electric SUV

Honda Cars India, which has made exports a key strategic pillar for the growth of its internal combustion engine powered SUVs, will transition into a hub for electric vehicles with its new project ‘ACE’. 

Sources say that ACE — which stands for “Asian Compact Electric” — will be ready by 2026 and almost 50-70 percent of the vehicles produced in India will be exported to key overseas markets including Japan.

According to several people in the know, a product with a codename DG9D with a potential volume of one lakh units’ annual volumes are being discussed as part of almost four new models for the future being planned for the Indian market.

In an email response to Autocar Professional’s request for confirmation, a Honda Cars India spokesperson said, “As a policy we cannot comment on any future product and its business strategy due to confidentiality.” 

At the launch of all new Elevate, Honda Cars India had announced that it plans to have a portfolio of five SUVs in the country and it intends to use India as an export hub in the future. At that time the company had also announced that its first EV based on the Elevate platform would arrive in two or three years.

On the sidelines of the 2023 Japan Mobility Show, Honda Cars India (HCIL) senior management had confirmed to Autocar India that the retooling of its plant in Tapukara, Rajasthan for EV production will commence in 2024 itself.

With the incremental volumes expected from exports the company may look at additional investment in the country including capacity.

The plant currently still has available capacity, and hence, it can accommodate a new model line, but the Honda Cars India President and CEO Takuya Tsumura had confirmed to Autocar India that an increase in capacity is on the cards. Going back to a second plant isn't ruled out either, but if that happens, it would be much later depending on the volumes.

While Honda hasn't announced a specific amount, it has confirmed that an additional investment has been earmarked for this new EV and future EVs. “As we've mentioned before, we are going to launch a BEV within the next three years, so naturally there will be some amount of investment for that,” Tsumura said, adding: “And our plan is to keep pushing forward our electrification.”

This increase in production capacity is not only to serve domestic sales but also exports of the Elevate (which have yet to begin) and the EV, after it goes into production. In fact, like the Elevate, the EV is expected to be a global model that will be exported to many more markets than the City and Amaze are.

To underscore the importance of the role of India in the global scheme of things at the premier of Elevate SUV — Toshio Kuwahara, President and CEO, Asian Honda Motor and Head of Regional Unit (Asia and Oceania), Honda Motor Company had said, he is expecting that Elevate will contribute to further expansion of exports volumes from India.

“India is one of the key global hubs for exports for Honda. India is one of the most important automotive markets for Honda brands’ future. That is why the global premiere of the new premium SUV Elevate is staged in the Indian market,” Kuwuhara had said in June.

Autocar Professional had reported in December that the exports from India are likely to double by 2025 and with the addition of the ACE project, the share of overseas volumes from India could move to about 30-40 percent of the total output.

Honda Cars India spokesperson had confirmed that after its debut in India in 2023, Honda Elevate is scheduled for Spring 2024 launch in the Japan market under the brand name WR-V.

“In a first for HCIL, the model will be manufactured in India and exported to Japan. This strategic move is a strong reflection of manufacturing capabilities of India operations and solidifies our vision of making the country a key export hub in Honda business. We are sorry, we cannot make a comment on the export volume as of now,” added the spokesperson.