Honda Cars on Monday launched a sports utility vehicle (SUV) called Elevate at a starting price of Rs 10.99 lakh to reach its target of 35 per cent year-on-year growth in the October-March period of FY24.
Kunal Behl, Vice President (Marketing & Sales), Honda Cars India, told Business Standard that the mid-size SUV segment, wherein Elevate is placed, has recorded a compound annual growth rate (CAGR) of about 21 per cent in the last five years.
"Even in this year, the growth is primarily coming from this segment. This segment is very crowded. It has about 20 models. Elevate will have a distinctive position as it offers a unique shape, interior and exterior, and it offers a good package as far as comfort and convenience are concerned," he added.
Honda's sales in India stood at 44,255 units in the second half of FY23. "Starting from now, as we have the new Honda Elevate coming up, we are targeting a 35 per cent growth in domestic sales in the second half of this financial year," Behl stated. This means the company targets sales of about 60,000 units in the second half of FY24.
The company's domestic sales in the April-July period were 19,917 units, a drop of 35 per cent year-on-year. Behl explained that this fall is because the company has reduced the number of models it sells in India.
"A model line-up rationalisation has happened. Last year's sales included diesel-run vehicles, WRV, Jazz and fourth-generation City," he mentioned. These models have been removed from the company's catalogue. Honda Cars' annual domestic sales increased by about 7 per cent to 91,418 in FY23.
Behl did not reveal the booking numbers for Elevate but said that for some variants of Elevate, the waiting period is as much as 5-6 months already. The company unveiled this SUV in June and opened the bookings then.
"The bookings to date were done by people without knowing the price," Behl said. The car price announced today is "competitive," and the company expects the solid demand to continue, he added.
The company will begin the deliveries of Elevate from Monday itself. Elevate will compete with models like the Creta, the Seltos, and the Grand Vitara, among others.
The company's exports from India have also dropped to 6,170 units in the April-July period this year as compared to 8,637 units in the corresponding period last year.
"In the export market, we are very confident that by the end of this financial year, we will have much higher growth. It is again due to some rationalisation of production that happened in the first quarter of FY24... Last year, we had a growth of 17 per cent in exports. This year, we are expecting strong growth in the export segment," Behl mentioned.
The key export markets for the company are Turkey, Mexico, the Middle East and South Africa.
In June, the company's President and Chief Executive Officer, Takuya Tsumura, told the newspaper that Honda Cars plans to roll out its first India-focused electric vehicle (EV) in the next three years. The Japanese carmaker would be launching a total of five premium SUVs in India by 2030, he had said.