Honda Cars India Planning a Small Hatchback to rival Maruti Suzuki Alto

Honda cars India has started a feasibility study for building its third plant in India, which is likely to be set up at Sanand, Gujrat, claims a report published on Financial Express. And what is interesting to know is that this new third plant is likely to manufacture an all-new entry-level small car, which will cost around Rs 3-4 lakh. The company that has only one facility in function now, is also planning to begin production at its second plan in Tapukara, Rajasthan by early 2014.

As per the report, these plans were discussed at a top-level meeting in New Delhi last month, where Honda's global chairman Fumihiko Ike and global president Takanobu were present. This new small car will be positioned below Honda Brio, which is by far the most affordable vehicle in the Honda Cars India line-up.

“Last month, Honda's global meet was held in India with a focus on gaining share in the country's car market. A feasibility study has been started for a new plant, for which several locations are being considered. This plant will make a new car below the Brio by 2017, called the World A-entry hatch,” a source close to the development said.

The new small car will be launched in the mass entry level hatchback segment, where some highly successful cars like Maruti Suzuki Alto and Hyundai Eon are already there. Honda that has recently tasted the success in the highly competitive entry level sedan segment with Amaze, is surely hoping to grab a big market share in the mini cars segment as well.

“We have to run fast to get volumes in India because we are very small today. Honda feels that to maintain and grow its global market share by 2020, increased capacity will be needed in emerging markets like India, from where the growth will actually come, since developed markets are near saturation. Talks are on for various products, but nothing has been frozen. But only when we are sure of utilising the new capacity at Tapukara, can we ask the headquarters for more investment,” a Honda Car India official said.

Responding to queries, Honda Car India said, "As a standard practice, we refrain from commenting on market speculation and rumours. Our current focus is to meet the deadline for our Tapukara Plant and begin car assembly operations there by next year".

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