Honda feels currency heat

Calcutta: Honda Cars India Ltd (HCIL) may raise the prices of its vehicles for the second time this quarter if the rupee does not stabilise.

The company revised prices in August by up to Rs 35,000 because of a rise in input costs and a hike in customs duty.

It is now the falling rupee that is making the Japanese company jittery. Honda has low local inputs for vehicles such as the CR-V and Civic, its big-ticket launches this fiscal.

“As of now we are holding on to our prices despite the unanticipated depreciation of the rupee,” said Rajesh Goyal, senior vice-president and director of marketing and sales at Honda Cars India.

“But unless it stabilises below the Rs 70-mark, we will not be able to avoid a price hike even though it is the festive season. We will play it by the situation.”

The company, which crossed the cumulative sales milestone of 1.5 million in August, having started operations in the Indian market in January 1998, is looking at a double-digit growth this fiscal.

Honda sold 1,70,026 units in 2017-18, a growth of 8 per cent over last year. In 2018-19, it has sold 79,599 units till August, growing at the industry rate of 9 per cent.

“We hope to finish 2018-19 with higher than the industry growth,” Goyal said.

While it has taken Honda over 14 years to reach the half-a-million sales figure, the 1-million mark came much more rapidly in just over three years and the 1.5-million milestone took just “two years and nine months”. “We hope to do the next five lakhs even faster,” Goyal said.

The company is due to launch the new CR-V, its premium SUV, on October 9 with the much anticipated diesel powertrain. The company is not looking at volume from the vehicle.

“CR-V is a premium product. We have managed to sell 17,500 units. We hope to do much more numbers with the new fifth generation CR-V only because we are offering a diesel powertrain. In a segment where 90 per cent of the sales come from diesel, we had no product. But even with that, the CR-V will not be a volume driver in as much as our Amaze, City and WR-V are,” Goyal said.

The company’s next big launch will be the new Civic “which will happen in this fiscal”.