It was interesting to read recently that Honda is planning to review its product strategies for the Indian market. Though third-placed in the Japanese car market, as a global player it is actually second to Toyota in the Japanese manufacturers rankings. However, in India Honda as a brand has been at a distant seventh, despite being here for nearly 17 years.

Even as of now, Honda is considering only a revamp of its product line-up, which does not seem enough as a survival/winning strategy in the Indian context. A recent McKinsey Quarterly reports that to succeed in the complete Indian market and not merely its niches, international companies will have to learn to do business the Indian way, rather than simply imposing global business models and practices on the local market. The scorecard suggesting techniques to win in India, gives out seven pointers that need to be taken care of. Alas, Honda as a brand has failed to live up to the scorecard.

In international business, Brand India is associated with affordable products and good global managers. According to the newspaper report, Honda is just now delving into affordable products in the form of the smaller diesel options, but what they really need to address is the “scaled down in terms of function but even more aggressively lower priced” cars. Honda requires an understanding of the needs of Indian consumers and should customize itself accordingly.

Many multinational companies have hired Indians visibly into their executive board, not only to gain goodwill among the Indian market but also have understanding of natives and the exact market pulse. They are the people who have grown up in India and have better experience about the market. In the auto industry, market leader Suzuki of Japan has Indian R C Bhargava as its Chairman. Japanese giant Toyota has hired veteran Sandeep Singh and others on their board. Deputy Managing Director Sandeep has been with Toyota for years leaving briefly for stints with Mahindra and later JCB. He has helped the company get a better insight of the market and has helped Toyota place them better in the market. Newer vehicles will have only a limited impact on Honda’s business here, until the company manages to get a grip on the consumer pulse.

My own limited experience about Honda leads me to believe they are arrogant. There are two types of foreign companies that try and win in India. The Honda-type believe that they can conquer using their global strategies and global experience by “teaching the natives”, while the others are companies that try and learn from the natives and address the needs of the natives. They get the idea that Brand India (or any market different from the highly developed countries) has to be dealt in a separate way than the global market. Again contrast with Toyota: While Honda is severing relations with the local partners it entered the market with, Toyota have retained Vikram Kirloskar as Vice Chairman even though Kirloskar group has now only about one per cent share in Toyota Kirloskar Motor. While Honda is keen to remove vestiges of its local flavor, Toyota chooses to accentuate its belonging to society. What a contrast!

Arrogant companies will not succeed in India. Adaptation to the Indian consumer’s demand for innovative, low-cost delivery systems and high value for money products is a “must”. Invading companies learn this over time – some sooner than others. Of course, some just remain unsuccessful and have good basis to complain about corruption and difficulty of doing business in India 🙂

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