Honda To Revamp India Strategy With New SUVs From 2028

Honda is preparing to change its approach to the Indian market as the Japanese automaker looks to reduce costs, shorten development cycles and expand its product portfolio, according to people familiar with the matter.

The company has entered into a vehicle development partnership with Tata Technologies, with the first model under the arrangement expected to be a sub-4-metre SUV. The SUV is targeted for launch in India in 2028.

The partnership could help Honda reduce vehicle development costs by up to 20% and cut development timelines by about half. Honda currently takes around five years to develop a new vehicle.

The move comes as Honda works on a broader global cost-cutting programme. The company is targeting more than $9 billion in cost reductions over four years as it responds to losses associated with its electric vehicle investments and shifts greater focus towards hybrid vehicles.

Honda and Tata Technologies partnership

Tata Technologies was selected to support the development of vehicles specifically for the Indian market. The engineering company has access to a wide network of Indian suppliers and is expected to help Honda develop products suited to local customer requirements and price expectations.

Honda will continue to oversee key areas of vehicle development. According to the people familiar with the arrangement, the Japanese automaker will retain control over technology, connectivity and driver-assistance systems, while also monitoring quality standards.

Tata Technologies was separated from Tata Motors and operates as an engineering and product development services company. It had announced in May that it had been selected to develop vehicles for a Japanese automaker without naming the company.

Differences over supplier strategy

The partnership reportedly followed differences between Honda’s teams in Japan and India over the sourcing strategy for future products.

Honda’s Japanese managers preferred continuing with established suppliers, partly to maintain quality and consistency. The Indian team, meanwhile, favoured greater use of local suppliers to reduce costs and potentially accelerate development.

The disagreement reportedly delayed work on some products. Honda has denied that there was a disagreement between its Japanese and Indian teams over supplier selection.

Honda said its product development process involves close collaboration between different teams and described it as inaccurate to characterise those discussions as disagreements.

Honda’s India portfolio has narrowed

Honda’s position in India has weakened considerably over the past decade. Its market share has fallen to around 1.3%, compared with a peak of 7.3% more than a decade ago.

The company’s India portfolio has also contracted to four models. At the same time, SUVs have become increasingly important in the Indian market, an area where Honda currently has limited coverage.

Rivals such as Tata Motors and Mahindra have expanded their presence with a broad range of SUVs across different price segments. Honda’s current India lineup is led by the City, Amaze and Elevate, leaving gaps in several fast-growing segments.

Honda has acknowledged that its existing product lineup has not always offered the combination of features, pricing and value that Indian customers expect.

New SUVs planned from 2028

The first product being developed under the Tata Technologies partnership is expected to be a sub-4-metre SUV. This segment is significant in India because of its popularity and the tax benefits applicable to smaller cars.

Honda has limited representation in this category, making the upcoming model an important addition to its portfolio. The company has indicated that it plans to introduce vehicles in both the sub-4-metre and midsize SUV categories from 2028 onwards.

A midsize SUV is expected to follow the smaller model. Honda is also expected to work on strengthening its sedan portfolio, an area where the company has traditionally had a stronger presence in India.

Honda looking to rebuild its India business

Honda’s renewed focus on India comes as the company reassesses its global product and investment strategy. The automaker expects losses related to its EV business to exceed $12 billion and is looking to reduce expenditure while placing greater emphasis on hybrid technology.

For India, the immediate focus appears to be on developing products that are more competitive on pricing, features and localisation.

Honda has also indicated that it wants to make its Indian manufacturing and sourcing operations more competitive. If the upcoming locally developed products achieve the required sales, quality and profitability targets, India could potentially become an export base for the company.

The success of the new strategy will ultimately depend on how effectively Honda can close its product gaps while maintaining the quality and engineering standards associated with the brand.

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