honda: Honda Cars to discontinue production & sale of Jazz, WR-V, and 4th Gen City in India

The local unit of Japanese automaker Honda Cars India (HCIL) will halt production and sales of its premium hatchback Jazz and WR-V in the Indian market, two sources informed of the case told ETAuto. With this, the car manufacturer will only have three models on offer and a very meager share of the market.

According to the first source, the company will stop producing Jazz after October 2022, while the WR-V crossover will not be produced after March 2023. The automaker will also stop production and sales of the 4th generation Honda City in the country by December 2022 . However, the 5th generation of the sedan remains available on the market.

As these three models go off the shelf in India, Honda Cars will only have three models on offer: Honda City, Honda Amaze and Hybrid City. WR-V and Jazz were among the best-selling cars for Honda in. If they stop, a vacuum will be created for a larger part of the Indian car market.

ETAuto contacted Honda Cars India for comment, but they declined to comment. “We cannot comment on market speculation,” an HCIL spokesperson said.

The WR-V was the first model developed by the Honda R&D Center of Brazil in collaboration with the Honda R&D Center of Japan and was the first Honda product to achieve 50,000 unit sales in India in its first year of launch and accounted for nearly 28% of total market sales of HCIL.

“If the decision to leave the hatchback segment is confirmed, I personally think Honda is missing a trick by not playing in the most affordable segment in India. For many customers in this segment, Honda is an ambitious brand. This means that Honda will no longer be a consideration for a first-time buyer on a budget,” said Kaushik Madhvan, Independent Consultant, Mobility, Frost & Sullivan.

However, according to our sources, the automaker is gearing up to launch a new compact SUV shortly after the WR-V’s discontinuation. The automaker will start production of a new compact SUV codenamed 3US/31XA in August 2023, and the expected volume will be around 40,000 units in the first year. Due to the lack of SUVs in the portfolio, the market share has shrunk to below 3%. In fiscal 2022, commercial vehicles sold more than passenger cars and Hondas for the first time as Honda members, while others like Kia, Hyundai and , which have an SUV-heavy portfolio, won.

WR-V will have one of the shortest life cycle products for the automaker in India, while Jazz had three generations over 13 years. Jazz peaked with annual sales of 42,000 units in 2016. Industry experts suggest the automaker is looking for products that are premium in terms of profitability and product. In December 2020, the automaker ceased production of its premium cars Honda Civic and Honda CR-V with the closure of its old factory in the country.

Probably the strategy to stop production of Jazz and WR-V is in line with the premium ambition of the previous president and CEO, who had said that they will not sell a car under Honda Amaze.

Recently, the newly appointed CEO told ETAuto that the company was profitable in FY2022 after two consecutive years of losses. “This is a very important market… the fourth largest in the world. Compared to three to four years ago, we have scaled down somewhat, but our business is now getting stronger. Fortunately, the actions we have taken (closing Greater Noida) have returned us to a profit, said President and CEO of Indian operations Takuya Tsumura recently.

Honda Cars’ market share shrank from a high 7.26% in 2015 when it sold 192,059 units to less than 3% today, at less than 90,000 units per year. As of 2020, it decided to close its oldest factory in Greater Noida, which had a capacity of 120,000 units per year.

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