Honda has achieved tremendous profits with its diesel product launch strategy

Honda Cars India has become a pioneer of diesel car market, the company first took the risk in 2013 April on Amaze compact sedan. The company’s first diesel car for Indian markets turned out to be a blockbuster hit. Honda has since then been on a profit ride.

Honda has churned best sellers in FY14, during the period, the profit turnover increased by over two fold with a gain of Rs 1,109.7 crore, against the earlier period of Rs 479 crore. The data was provided by Registrar of Companies. In terms of accumulated gains, the loss value in FY14 is Rs 1,846.6 crore, against Rs 1,368.9 crore acquired a year ago. The increase in net sales during the period is 94.4% and the profit generated was a whooping Rs 8,826.7 crore contrary to Rs 4, 1541.6 crore noted the previous year.

The period of FY14 was creditable for Honda, with two massive hits, the all new City and entry level Amaze sedan. The two cars alone have enabled Honda to enhance its market share by double the volume, which now stands at 5.8% against 3% recorded in FY13. ‘’It is Honda’s innovative launch strategy that enabled it to reap admirable benefits’’ said, auto analyst of CIMB, Pramod Amthe.

Honda has achieved great milestones on the back of a couple of products, and the product drive emphasis is not on the company’s achievement to reach breakeven records, but it’s power to sustain growth and continue to build profit blocks. Although the company has achieved milestones under pressurized economy status, there is still lot of product planning to work on. The auto market is getting intensely competitive by the minute, visible on the overload of product launches in 2014.

Honda rocked the annual domestic sale charts, the highest of any auto firm, with 134,339 units in 2013 to 14 financial year. The overall year on year growth income is 83%. The company stressed on the fact that it was the new City and Amaze that drove milestone sales. As mentioned earlier Honda’s first taste of profit in 2013-14 FY began with Amaze, it was an instant best seller, a new diesel venture risk turned out to be fruitful.

Amaze has been a best seller since inception, and its profit driving features were trendy compact sedan body, super comfy, spacious and vibrant interiors. The major selling characteristic is the best-in-segment 25.8kmpl mileage generated by the revolutionary 1.5 liter i-DTEC diesel engine. Fuelled by the success of Amaze, Honda used the same i-DTEC diesel power train technology into the all new City that launched in early 2014. The car is engineered with world class 26kmpl mileage and sports an innovative ‘Exciting H Design’ technology.

Although Amaze is a top seller, Honda has to be concerned of the competition; the strong contenders are Maruti Suzuki Swift Dzire, Hyundai Xcent and Tata Zest. The rivals of new City are new Corolla Altis, Volkswagen Vento and Hyundai Verna.

Honda has incorporated its revolutionary i-DTEC diesel engine technology into its latest MPV best seller Mobilio MPV. The mystery behind the company’s extended pathway into profits is now cracked, and now the steaming topic of discussion is the continued sustainability.