Honda in India: New Challenges

Abstract

This case is about the challenges faced by Honda Cars India Limited (Honda India) since 2011 in the highly competitive Indian automobile market. Honda India was one of the first foreign automobile companies to enter the Indian market after the economic reforms introduced in the early 1990s allowed foreign players to start direct operations in the country. Despite the lack of small cars, Honda India quickly established itself as a leader in the mid-size sedan segment. Some of its models like Honda City were highly preferred by the upper middle-class Indian customers. However, Honda India started facing heavy competition from other foreign players in the market like Volkswagen and Hyundai. Its best performing models like Honda City and Honda Civic lost their market leadership status.

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Issues

The case is structured to achieve the following teaching objectives:

• Understand the challenges faced by companies due to the macro-environmental factors that are beyond their control.
• Appreciate the importance of modifying the strategies of a company depending upon the prevailing market conditions.
• Analyze the strategies that market challengers should follow to capture a higher market share from market leaders.
• Discuss and debate whether the steps taken by Honda India to meet the new challenges helped it in improving its performance in the Indian market.
• Explore the strategies that should be followed by Honda India to consolidate its position in the small car segment of the Indian automobile market.

Keywords

Macro-environmental factors; Deregulation of petrol prices; Declining Indian Rupee; Pricing; Long-term strategy; Vision; Business Strategy; Product Management; Competition; Competitive strategy; Emerging market; India; Indian automobile market; Honda

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