It appeared that Honda Cars India is all set to join the promising premium compact crossover segment which is currently bustling with activity. The fact that the Honda HRV was spied testing in the country more than once strongly indicated that the automaker is not far from launching it in our market but unfortunately that is not to be.
According to Autocar Professional’s sources, Honda has called off its plans to launch the HR-V in India at the last moment. It is being said that the automaker was very close to commencing trial production (a few prototypes were already built locally) at its Greater Noida facility.
The publication also reports that, according to its sources, Honda had confirmed a volume of 12,000 units over two years to its vendors and then revised it to 8,000 units due to the ongoing slowdown before cancelling the production plans altogether. The Japanese automaker is reported to compensate its vendors who have made additional investment in anticipation of the HR-V.
The reason for shelving the project at the last minute boils down to localization level. Honda reportedly couldn’t improve the proportion of locally sourced components for the HR-V more than 30% without significantly ramping up its investment (also heavily localization is an extremely time consuming process) and this would mean being at a disadvantage when it comes to pricing.
Though a significantly localized Honda HR-V would have been an attractive proposition in India, the cost-benefit analysis from Honda’s point of view didn’t make a sound business sense. The recently introduced MG Hector and Kia Seltos changed the segment dynamics with highly attractive pricing, thus emphasizing the importance of localization in this segment.
So, at least for the foreseeable feature, Honda Cars India’s coverage of the promising crossover segment would remain unchanged. As of now, the company retails the Mobilio-derived BR-V and Jazz-derived WR-V in addition to the globally renowned CR-V.
Honda’s current focus will be on upgrading its existing engine lineup to BS-VI emission standards before the deadline. The company must be also conducting several studies to identify the right products for India’s strong push towards electrification.