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It is true that technology has been considered a dramatic core competence of Honda over the ages. Somewhere early along the line, they brilliantly converted technology into deliverable customer value and became amongst the top auto sellers of the world. The third world for decades meant only two wheeler sales, given the lack of purchasing power. And with the Hero group ensuring that world class standards were beaten time and again in the motorcycle segment with the Hero Honda JV, Honda’s focus during its 14 years of India existence never really got on to how energetic could the passenger car segment be in India. Their JV with the Bharat Ram Charat Ram convert called Sriram Industrial Enterprises Ltd notwithstanding (Honda-SIEL), cars were sold by Honda in India only for presence and only to have “Success against all odds,” the initial philosophy of the legendary Fujisawa Honda when Honda entered the extremely negative looking United States market with their motorcycles.
And that has how it has been for Honda for most of the past few years, that is, until now. The economic slowdown has suddenly brought out the sales orientation of Honda like nobody’s business. An erstwhile lumbering Honda has seen a transformation that, though not incredible, is enough radical to surprise the Wilde out of Oscar. Take their Honda Civic hybrid shock marketing warfare tactic, for example. While the Honda Civic hybrid had just sold around 60 odd units since its launch in June 2008, a smashing limited time Rs.8 lakh discount offer for a week in November 2008 got them up by a smashing 235 units within a week itself. If that seems great, think about the fact that Honda is the only company in the car industry that changes product design not for ergonomics or for design efficiency, but purely to give customers exciting variety – their new Honda City and Accord designs included. Not surprisingly, on the JD Power India Sales Satisfaction Index Study, Honda ranks a close third! That’s a brilliant vindication of the fact that consumers perhaps are going more by the sales effort during these downturn times than by other factors.
Enough said about growth; experts now say that there is a strong belief among the experts that the Honda growth till now was just a small lull before the storm and worst is still to come for the Indian automotive sector. Well, perhaps they’ve not heard of Fujisawa yet. Instead of getting worried, Honda is in fact banking big on emerging markets like India to get out of the deepening global potholes. As the ex-CEO of Honda Motors Corporation, Takeo Fukui once said, “India has less risk than China. India has political transparency and a neutral sentiment towards Japan.” It seems that the company is taking Fukui’s statement very seriously as India is clearly now one of the priority markets on their charts.
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Source : IIPM Editorial, 2009
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
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