Honda India struggling: Market share slips to 0.74 percent in Jan 2012 – Recalls President and Marketing Head

Japanese car manufacturer, Honda Motors has recalled their top officials Mr Takashi Nagai and Mr Seki Inaba from their Indian subsidiary Honda Siel Cars India. Mr Nagai held the post of President & CEO of Honda India while Mr Inaba was the Marketing Head in India. Honda official on the condition of anonymity said that this move is alarming as it was not at all expected. Previous Honda India Head, Mr Masahiro Takedagawa, held his post for a term of 5 years while Mr Inaba’s predecessor stayed for a period of four years. Mr Nagai was appointed less than two years ago while Mr Inaba was appointed in April 2011.

There is no doubt that Honda cars are struggling in India. Honda Motors has failed to match pace with the growing Indian auto industry. Once upon a time, Honda was the leading premium mid-size car manufacturer in India. Honda City sedan has been the leader in its segment for more than a decade but today, Honda City is nowhere close to the top sellers in its segment.

Honda Motors has been operating in India since the past 14 years and today, they hold a less than 2% market share in Indian car industry, whereas new entrants like Volkswagen, which entered India 4 years back, holds a market share of 3%. In Jan 2012, Honda Motors market share came down to just 0.74%, selling less than 1,800 cars in India.

Major reason behind Honda losing to competitors is because they don’t have a diesel engine powered car in India. Number of petrol car buyers in India is declining while the number of diesel car buyers is on an exponential rise.

Mr Nagai will be replaced by H Kanayama as the Honda India Head. Mr Kanayama currently holds the position of Honda Taiwan Head and will join Honda India on 1st April 2012. Honda Motors probably wants to reshuffle their top management in India and make a fresh start as they would not like to lose-out in a market they understand very well.