Honda plans to launch small cars in India
TOKYO: Honda Motor Co, Japan's second-biggest automakers, is studying developing small cars with engines of less than 1.2 litres to woo buyers in India and other countries. The small cars will also enjoy tax advantages in India, where they make up 75% of the market, Masahiro Takedagawa, chief executive of Honda Siel Cars India Ltd said in an interview at its headquarters in Tokyo on Thursday.
Honda is challenging Suzuki Motor Corp's dominance in India, where its unit Maruti Udyog Ltd. has a 50% market share. Automakers are developing cheaper, smaller cars to entice the nation’s 45 million motorcycle and scooter users. India's car market, Asia's fourth-biggest, may triple to 3 million vehicles a year by 2015, according to government estimates. "The key is which non-Indian automaker coming to India can cut costs furthest in order to complete with the local companies," said Koji Endo, a senior analyst at Credit Suisse Group in Tokyo.
India last year cut the excise tax on small cars to 16% from 24%. The change only affected petrol cars that are shorter in length than 4 meters (13.1 feet) and powered with engines smaller than 1.2 litres.
Honda shares fell as much as 0.9% to 4,360 yen and traded at 4,390 yen as of 10:50 am in Tokyo. GM's Engines Automakers such as General Motors Corp, the world's biggest car maker, changed engines for its Chevrolet U-VA cars to meet India's tax laws and increase sales.
Source: Economic Times
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