Honda not to rely on low profit models for Indian market

Honda not to rely on low profit models for Indian market

Japanese automaker Honda has said that they would not enter the price war in the Indian market by selling cars at a lower profit margins.

Indian market is set to see the entry of some ultra cheap products. Tata Motors is scheduled to launch a Rs. 1 lakh car sometime next year.

Nissan Renault is also working on a USD 3000 product for the Indian automobile market. Maruti already has a variety of low cost cars which are big sellers in India.

Honda is scheduled to launch their first compact car product in India by 2009. However, this is not likely to be a cheap car as they are aiming to take on the existing premium hatchbacks in the market like the Suzuki Swift, Hyundai Getz and Chevrolet UVA.

Honda Chairman Satoshi Aoki said in a statement: “Our mini car in Japan costs around $9,000 … to produce something at one-third the cost will be rather challenging.”

He added: “The North American business is very important to us, but we like to add business from other markets like China, India, Southeast Asia and Brazil, so we won’t be dependent on a single market.”