Honda Cars not sure about achieving 3 lakh sales target with just 2% growth

Honda Cars India expects sales to grow in double digits in the current fiscal despite several challenges though it says achieving a total of 3 lakh units during the year looks to be a difficult.

The car maker, which is all set to enter the fast-growing mid-range sports utility vehicle segment next month with its seven-seater BR-V, had sold 1.92 lakh units last fiscal, a growth of just 2% over 2014-15.

"As far as Honda is concerned, we should have a decent growth, hopefully a double-digit growth during the fiscal," Honda Cars India Senior Vice-President (marketing and sales) Janeshwar Sen told PTI.

The company had earlier set a target of selling 3 lakh units annually by 2016-17, but due to "challenging conditions" it is not sure if it would be able to achieve that.

"The market remains very challenging. Prices have gone up due to various cesses, there is no clarity on the diesel (front). So, we are pragmatic but need to look at the situation practically," Sen said.

The new Amaze has been received well and BR-V launch is round the corner, which should help the company, he added.

"Besides, we plan to add around 45 new dealerships this fiscal, taking the total to 340 outlets by the end this fiscal. It should also help as we would be tapping new markets," Sen said.

He, however, admitted that the automobile industry as a whole is under pressure and it won't be easy to achieve sales targets.

"It remains a challenging environment for the industry as a whole. Passenger vehicle industry grew over 7% last year. But if you take the fourth quarter alone, growth was just 2 per cent," Sen said.

Absence of a long-term road map for the industry is one of the major issues affecting the sector, he noted.

Asked about just 2% growth last fiscal compared with the industry figure of over 7%, Sen said: "Broadly there were two major issues. Rapid shift towards petrol cars was one and MPV segment witnessing a steep decline was the second major issue for us."

Elaborating, he said: "It takes some time to make changes in the production schedule. So, moving from diesel to petrol took some time and that impacted us a bit. Second, Mobilio sales were hit as the entire MPV segment went down."

He also attributed the performance to the company being not that strong in commercial sales.

On expectations from the BR-V, which would compete with the likes of Renault Duster and Hyundai Creta, Sen said: "It's a hot segment. One thing we are confident about is this vehicle will do well."

Hyundai Creta and Renault Duster are priced in the range of Rs 8.46 lakh and Rs 14.42 lakh (ex-showroom Delhi).

"What we are offering is value. It is versatile because of third row, there is boot space of 691 litres when third row is tumbled down. It is best-in-class. Besides, premium interiors and high ground clearance of 210 mm are other highlights," Sen explained.

A six speed manual transmission mated with 1.5-litre petrol engine and an average of 21.9-km per litre for diesel variant are the other highlights of the upcoming vehicle. BR-V will hit the roads on May 5.