The cancellation of the Honda HR-V launch in India is imminent.
Rising costs, the slowdown in the market, and the emergence of competitors are the prime reasons for the cancellation of the Honda HR-V launch.
Honda proposes to compensate local suppliers for tooling investment.
Reports say that Honda Cars India has stopped working on the midsize-SUV, Honda HR-V at its Greater Noida plant. This SUV is available in some markets as Honda Vezel. Its launch in India is thus, in doubt. Honda Cars India refuses to comment on this speculation.
The feasibility study was done way back in 2013, immediately after its launch in Japan and the US. The plans did not materialize because of the costs involved in importing the components to India. At the same time, Honda had plans to introduce the cheaper Honda BR-V.
Subsequently, the MUVs witnessed a surge in the market in 2016-17. The Honda WR-V, launched in 2017, was a successful attempt, as well. Thus, the market share of Honda UV Cars doubled to 6.50% in FY2018. It encouraged Honda to try out the production of Honda HR-V Facelift in India.
Costs were a significant concern. Hence, Honda planned to localize the model as much as possible. However, the slowdown in the Indian auto market proved to be a dampener.
The production was in full swing with a launch being planned for December 2019. In the meanwhile, Kia Seltos and MG Hector entered the Indian market. These cars had a high level of imported content. In comparison, the Honda HR-V found itself at a disadvantage.
As Honda stopped production, it decided to compensate the local suppliers for investing in the Honda HR-V. The amount could be approximately Rs 20 lakhs per vendor. However, most of the localized parts could be shared with the Honda City and Honda Jazz, and the new tools could fit the models currently running in India.
With the Honda HR-V launch plans shelved, the company is concentrating on launching a fifth-gen Honda City Sedan in 2020.