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Gaku Nakanishi, President & CEO, Honda Cars India
Oct 12, 2018 | Source: Business Standard
On rising fuel prices and its impact on car industry: Mr. Nakanishi, the President & CEO of Honda Cars India said that, certainly rising fuel price is a concern as a car is a second biggest purchase decision for an individual after house. Since it is a major decision, customers are careful about the driving cost and the ability to keep paying the EMIs. Of course, it is affecting sentiments.
On outlook for FY19 vis-à-vis FY18: In Q1FY19, the industry grew by high double-digit but declines in Q2FY19. Mr. Gaku mentioned, if this trend continues, the industry will suffer. We are waiting to see how this month (October) goes. If it recovers, the forecast can still be positive. But if it declines this month as well, then we will have concerns over growth numbers. This month is very important for everyone.
On the biggest concern right now: The biggest concern at the moment is high fuel price. Even in Japan people are sensitive to high fuel prices although, the per capital income is 20times higher in Japan than in India. However, petrol price in Japan is just Rs. 90/litre and it is not significantly lower in India in spite of the wide difference in per capita income.
On new technology introduction in India: At Honda Cars India, the team is preparing an Electrification strategy, which will not just have electric vehicles but also hybrids, including plug-in hybrids. Though Electric Vehicle is the most efficient, one from the regulation point of view, its cost is quite high. We need to have best mix of petrol, diesel and electric/hybrid vehicles that will be best for the society. We will start with hybrid in 3 years. Mr. Nankanishi said, the company is contemplating what strategy is best for the consumer and the country.
On tax differential for Hybrid and Electric Vehicles: The President & CEO said, in Thailand, the Government offers major benefit on hybrid and it makes it easier to launch product. In India, there is no incentive and hybrid costs a lot. All together need to work harder to reduce the cost and also would need a dialogue with the government.
On channel inventory and financial hardships is any: The interest rate is increasing and banks have started to squeeze with a much stricter investigation before lending. Some dealers, not only in Honda, are in a very tight situation. In order to support and motivate them, we are trying to bring dealer incentives.
On Marketing Network expansion: Honda Cars India is present in Tier-1, Tier-II and Tier-III cities in India. The CEO said, the company has covered Tier-I cities and coverage in Tier-II cities is almost done. However, the fastest growing market today is the Tier-III cities. So going forward, we have found many potential markets which we believe will grow and thus want to cover. For this the company shall put up new showrooms and thus fill the gap.
On Market Share Trends: Honda Cars India is now the 4th largest passenger car player in the market after Tata Motors. Thus for our team market share is a very important and key indicator. But for this we cannot sacrifice on quality for the cause of volumes. Philosophy of Honda Cars India is to meet customers’ expectations and the focus is to deliver a durable, reliable, and quality product. The Indian customer appreciates Honda and we thus want to maintain this distinctiveness.