Honda is on the waning phase of its aged brands only to leave some share in the market down. The company doesnot view the promising growht of the industry and it has been on stable level to lose its share in the market. Honda is handicapped by the ageing models in its product portfolio and the reversal of fortune happened with the slack of yen in the world economy. The sale during the first four months of 2010 came down by 2.7% (21746 units) whereas the net sale of utility and multi-utility cars in India increased by 30.8% during the same period. Honda’s popular brands – Jazz, Civic, Accord and CR-V were the worst affected. The flagship range, City survived the crisis.
In April 2010, Honda could sell just 188 units of Civic making a fall by 69% against the sale in 2009. Another factor that derailed the run of Honda is the strong variable for yen against rupee. This affected the parts like airbag to go for the competitive pricing. Majoirty of the Honda ranges in India are sold with domestic components- 28% to 77%- while CR-V (SUV) is a compeltely imported unit. During March 2009, Honda had to increase its price for its range from Rs30000 – Rs3.5 lakhs, in which the utmost hike went for CR-V. during the last six month period ending April, the yen had an appreciation value of 7.04% against the rupee. But the industry observers and analysts feel that Honda has got some more factor to worry about – lack of new models.
The competitors are giving a new face to the market with more models. Civic, bringing some genuine volume to Honda, faces stiff competition from GM (Chevrolet Cruze), VW (Jetta); while Honda’s Jazz is dipping to an all time low volume, is pitted against Hyundai’s i20. CR-V does not convey proper compatibility for the localization. Honda has now realized the need of the hour and is to focus on launching new models. To arrive at more such models, the top most priority is to have more dealers- from the existing 117 to 150 by the second half of 2011.