Honda vs Hyundai - Why Japanese OEM lost the race to its Korean Competitor in India

Honda and Hyundai both entered the Indian market around the same time (‘95 and ‘96) and since then, Hyundai has undoubtedly trekked its way up to the heart of Indian consumer while Honda has had its own rocky path.

Hyundai with a current portfolio of 12 cars has the 2nd spot and ~17% market share in the otherwise Maruti Suzuki dominated Indian PV market.

On the other hand, Honda has a market share of only 5.16% and sold 1,57,313 car units in FY17 (~1/3rd of Hyundai’s 5,09,705 units and 1/10th of Maruti’s 14,43,641 units).

Undoubtedly, Hyundai ran this race much faster and quite smarter than Honda — at least till now.

I think there are 3 main reasons why Honda, despite being a technologically advanced and globally acknowledged company couldn’t win the Indian market:

Loose Brand Vision:

Honda entered India with Honda Civic, the luxury sedan and soon after launched Honda city— till now its most selling product. It established an image of a premium brand — a brand that was accessible to elite and hence a dream.

Honda compromised on this image by launching mass targeted small cars like Brio, Jazz and Amaze (which later became a taxi car) severely affecting the image and sales of its premium cars. Then again in 2015, Honda shifted its focus to what it does best — Premium and Elite.

Now, the mass customer doesn’t relate to the brand and the elite customer lost interest, leaving the brand questioning its identity and vision.

While Hyundai entered with its small car Santro and made it’s way smoothly in all the other segments. Till now, Hyundai has a good presence in the small segment and has a growing hold in the luxury segment. The brand has a vision that speaks — ‘Fluidic cars with advanced features and slightly high price’ — not too complicated for Indian customer to understand.

Late response to market trends:

Ford Ecosport is an iconic product not just because it’s a great car and flaunts hi-tech engineering but because in 2013, it drove attention to the otherwise absent segment in the Indian automotive market — Compact SUV. As soon as the product got good sales, Hyundai responded with its compact SUV Creta (in 2015). With Creta, the market exploded and soon enough Maruti launched its Vitara Brezza among many others like Duster, Terrano, XUV500.

In 2017, by the time Honda responded with its BRV — the game was already won and prizes were distributed to the winners. These cars had registered themselves in the state logs and the hearts of the upper middle class Indian. Honda couldn’t make the mark again, like it couldn’t do in the small car and hatchback segment.

Weak Product Image:

Most people remember Honda with its iconic ‘City’, some with ‘Accord’ and ‘Civic’ as well. However, nobody wants to remember Honda with Amaze, not even Honda itself. Honda launched Amaze completely out of its playing field - small car in a diesel variant, leading to a bad product with many issues and many recalls.

Honda launched Mobilio, Jazz, WRV all with designs not compatible with Indian roads — poor mileage and low ground clearance. Soon enough, these weak product images led to a weaker brand image. The image that said — Honda doesn’t understand us.

In India, car is still an emotional purchase. As they say it, ‘The way to an Indian’s garage passes through his heart’.

Maruti is the brand that grew up with the Indian middle class. Mr Sharma bought an Alto in 2000 and now he drives a Ciaz, Maruti is home to him.

Hyundai speaks to the youth — fluidic and fast. Great features, advanced tech and sporty designs — all within good money.

But for Honda, the way to hearts seems difficult. Honda needs to strike some powerful chords and more importantly with figuring out the right hearts.

Author: Kirti Jangra, Sr. Consultant - Automotive

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