Honda cannot just bet on Brio to win back India

As car launches go, it was neither wildly extravagant , nor unique. After all, launches are de rigueur in the run-up to the festive season, and Honda Siel's brand new baby, the 3.95-lakh Brio, was just one of four cars to hit Indian roads in the past 10 days. Yet, Brio is not just a car launch.

Brio's price was just one factor. Honda Siel, to be sure, never before aspired to be a volume player; it much preferred its association with status and luxury. (Honda has 99.9% stake in this company, the rest belongs to Siel.) But that was not all. There were significant departures from the Honda model - test drives for the media, in Vizag of all places, the focus on developing dealer network in Tier-II and Tier-III cities, the thrust on local sourcing, not just assembling . Says Seki Inaba, director (sales and marketing), Honda Siel Cars India: "We are betting on India to be the No. 1 car market in the world, ahead of China, in the future. Brio is the first step towards a shifting growth trajectory for us in India."

It is rare to see Honda on the backfoot. From the 1990s till recently, Honda's cars, led by the Honda City, commanded a premium and enjoyed long waiting lists. This enviable consumer pull was at work in the used car market too, and Honda cars commanded the best value. But over the past two years, Honda has found itself at the crossroads. Weighed down by its global woes, poor pricing strategy, which many call brand arrogance, and a lack of focus on India, the brand posted flat sales. Meanwhile , aggressive rivals such as Volkswagen and Ford have upped the ante in India.

So, the Brio is the down-but-far-from-out company's attempt to regain lost ground. For the first time, the company is trying out the aggressive pricing strategy for size and enter the volume segment of compact cars, which comprise over 60% of the Indian car market. Whether the move will pay off remains to be seen, but as Mohit Arora, executive director, JD Power and Associates , a global marketing information services firm, puts it, "This brings Honda back in the reckoning in India."