Honda Cars India – the Japanese automaker’s Indian division – has finally decided to localize the strong hybrid powertrain that it currently offers on a single car – the City sedan. Once localization happens, the cost of the strong hybrid powertrain is likely to reduce significantly as 1. Tax on locally produced car parts is lower and 2. Locally produced parts are generally more affordable than imported parts as the cost of making them is lower.
These cost savings mean that strong hybrid cars sold in India by Honda are likely to get cheaper in future. The information on Honda localizing the strong hybrid powertrain in India comes from the CEO of Honda Cars India, Mr. Takuya Tsumura, who was speaking to ACI on the sidelines of the new Amaze’s launch. Mr. Tsumura had this to say when asked about whether the strong hybrid powertrain of the City sedan would be localized,
It is part of the plan and consideration to localise hybrids in India. Generally, if we want to expand the business in India, we should do more localisation. Amaze has relatively high localisation, but future technologies also need to localise. At this moment, we are thinking about the strong hybrid. There will be a plug-in hybrid option in specific markets, which is costly in India. We have to consider what is the best fit in India’s context, and at present, it is strong hybrids. While developing the Elevate, we had to choose whether to develop more hybrid cars or BEVs (Battery Electric Vehicle) as quickly as possible to meet the [CAFE III] norms. We concluded that it is critical to have a BEV based on Honda Elevate platform but with future models we have decided to go with hybrid technology.
As we’ve highlighted in the past, Honda missed a party trick with the Elevate SUV by not offering it with a hybrid powertrain. We now know why. Using an imported strong hybrid powertrain in the Elevate would have pushed up the cost of the SUV, and this is something that Honda feels would have caused a drop in sales.
By localizing the hybrid powertrain, the Elevate Hybrid would be a lot more cost competitive, read affordably priced. We’ll have to wait for a while for that to pan out though as the current focus is on bringing a battery powered Elevate (electric vehicle) to the market by 2026.
That’ll be the first major intervention Honda will make to boost Elevate sales. In future, the strong hybrid powertrain is likely to make it to the Elevate mid-sized SUV, and the Amaze compact sedan as well given the fact that its arch-rival – the new Maruti Dzire – will get a Series Hybrid shortly.
Honda’s facing headwinds in India. The City sedan – a best seller for decades – is now a back marker in the full-size sedan space. The Elevate is doing quite poorly too, and the new Amaze has its task really cut out.
Apart from these three cars, Honda doesn’t have any other offering in India, in the passenger car segments. The brand shut down its Greater Noida factory, from where it used to assemble imported cars such as the Civic and CR-V, which while not bringing volumes, at least offered current Honda car buyers an upgrade path.
In the next couple of years, Honda plans to focus on SUVs. While the Elevate EV is expected to be here by 2026, there’s a 7 seat SUV too that’s in the works. We anticipate it to be the 7 seat version of the Elevate. Honda is also said to be working on a more affordable SUV to slot in below the Elevate. Details about this car are scarce for now.
