Mumbai, Oct. 8 -- Honda is targeting cost reductions of up to 20 per cent and a halving of vehicle development time in India through a partnership with Tata Technologies, as the Japanese automaker seeks to strengthen its position in the market. The agreement will involve Tata Technologies developing vehicles for Indian customers, while Honda retains control over key technology and quality decisions.
Honda currently takes about five years to develop a vehicle and expects the partnership to reduce that period substantially. The company is also cutting expenditure after losses linked to electric vehicles, which it expects to exceed $12 bn, and plans to reduce costs by more than $9 bn over the next four years.
Tata Technologies was selected after discussions between Honda's Japanese and Indian managers over supplier choices delayed work on some products. Japanese managers favoured established suppliers for quality and consistency, while the Indian team sought greater use of local suppliers to reduce costs and accelerate development. Tata Technologies was chosen for its network of Indian suppliers and its understanding of local consumer preferences.
The first vehicle under the agreement is expected to be a sub-four-metre sport utility vehicle, a segment that represents a substantial part of India's car market. It is targeted for launch from 2028, followed by a mid-size SUV, after which Honda intends to rebuild its sedan range. Honda has said it plans to introduce vehicles in both categories from 2028 onwards.
Honda's market share in India has fallen to 1.3 per cent from a peak of 7.3 per cent more than a decade ago. Its range has contracted to four models, leaving it behind lower-priced competitors including Tata Motors and Mahindra, particularly in the SUV segment. The company is seeking to make manufacturing and sourcing in India more competitive, with successful products potentially supporting exports from the country.
Published by HT Digital Content Services with permission from Construction World.