Honda to launch made-in-India SUV by 2023, size and pricing not disclosed

In yet another attempt to find its feet in the India market, Japanese carmaker Honda is going to launch a sport utility vehicle (SUV). The product – likely to be launched in 2023 – is going to be made in India, but is most likely to be exported to other countries.

“We acknowledge the customer preference shift to SUVs. The market share of the SUV segment is growing in India. We have studied the trend. I can confirm that a new SUV from the Honda stable is under development. This brand-new SUV is focused only for the India market,” said Gaku Nakanishi, president and chief executive officer, Honda Cars India.

In the last five financial years, from 2016-17 to 2020-21 (FY21), the SUV segment has witnessed a growth of 35 per cent, 49 per cent, 33 per cent, 15 per cent, 20 per cent, respectively – higher than the overall passenger vehicle segment.

Honda currently has the WR-V as the only product to offer in the compact SUV segment. But it has failed to become a choice for buyers with its popularity steadily declining.

Only 708 WR-Vs were sold in July, compared to segment leaders like Maruti’s Vitara Brezza and Hyundai’s Venue, which sold 12,674 and 8,185 vehicles, respectively.

While Honda didn’t divulge details on the size and pricing of the SUV it is planning to launch, industry sources expect it to be in the mid-SUV segment, where it will compete against the likes of Hyundai’s Creta, MG Motor’s Hector, and Kia Motors’ Seltos.

“The compact SUV segment is too cluttered with a strong line-up like the Brezza, the Venue, and the Nexon. Honda may want to target the mid-sized SUV segment, rather than have a product compete against its own WR-V,” said an executive of a rival company.

Last year, Honda in a scaling-down of its business, ceased the production of the CR-V and the Civic from its India portfolio, following the company’s decision to cease manufacturing operations at its Greater Noida plant. It instead shifted the production of the City to its Tapukara, Rajasthan facility.

This left the company with virtually two popular selling models – the City and the Amaze -which are leaders in the sedan segment.

In fact, Honda launched a facelift of the Amaze model with a new front grille and automatic light-emitting diode projector headlamps. This, the company believes, will keep the product as one of the leaders in the sedan segment till it rolls out the new SUV.

With sales of 40,778 units in FY21, the Amaze was the most popular model in the compact sedan category, behind Maruti Suzuki’s Dzire.

“Fifty per cent of our sales came from the Amaze. The unique characteristic of the Amaze is that in its segment, it has looked one class more premium than its rivals. For the sub-4 metre segment, it gives a sedan-like feel to customers, with a significant following from Tier 2 and Tier 3 cities,” said Rajesh Goel, director of sales and marketing.

But Goel knows that the City and the Amaze can no longer win the game in India, given the customer preference for SUVs. The popularity of the SUV segment has halved the sales of sedans since 2018.

“We see the shift to SUVs has accelerated in the first seven months of this year. Till July, the share of SUVs went up by as much as 34 per cent. So the pace is accelerating and the biggest hit has been taken by sedans. The sedan percentage share in each segment is decreasing,” he said.