Honda’s new SUV to launch before Diwali 2023: Hybrids to have priority over EVs for now in India

Transcribed by Amber Banerjee
Honda Cars India recently marked 25 years of the City sedan being on sale in India. Launched first in 1998, the City has been a long-time favourite sedan in the country and has sold over 9 lakh units in India and export markets. Most recently in April 2022, the company launched the City’s hybrid version based on the fifth generation, called the Honda City e:HEV. TOI Auto sat down with Honda Cars India, President and CEO, Takuya Tsumura as he gave us an update on the progress of the City to the City e:HEV, some exciting bits about Honda’s upcoming SUV and his personal insights on Honda’s trajectory towards electrification. Here is how it went.

Market response for Honda City e:HEV
The City e:HEV is the company’s first-ever hybrid offering in the country. It aims to take the model’s legacy of reliable and affordable mobility further with its 1.5-litre Atkinson Cycle engine returning 26.5 kmpl in combination with the hybrid electric technology. However, not many have left the showroom floors due to the ongoing geopolitical and supply chain issues.
Clarifying the limited sales for the City e:HEV, Tsumura said, “Currently, the actual demand for the Honda City e:HEV is 9-10 percent of overall City sales right now but I believe that is due to the supply limitations that we are facing. By next year we are planning to increase production for the e:HEV by at least 10 percent. While the semiconductor shortage is somewhat improving, we are still not producing enough cars as hybrids require more semiconductor chips, adding to the production constraint for India and worldwide.”

With the recent launch of two other hybrid SUVs from two of its closest competitors, the Honda City e:HEV could be the only hybrid in the country that is losing ground due to manufacturing constraints. Priced at Rs 19.89 lakh, the City e:HEV is costlier than the Maruti Suzuki Grand Vitara and Toyota Hyryder strong hybrid.
An all-new SUV for India
Honda India has been working on an all-new offering for the highly popular mid-size SUV segment, currently being dominated by brands such as Hyundai and Kia.
When asked about the vehicle, Tsumura confirmed to TOI Auto that Honda India is indeed gearing up to launch a new SUV in 2023 before the festive season. “Actually, we have already planned and completed the development stages and we have the products and cars at the factory. Yes, we might be late to enter the compact SUV segment but I am sure that next year we will be able to launch our SUV as per the plan. We are confident about the model that we are bringing for Indian customers.” Tsumura said.

He also pointed out that based on Honda’s long-running philosophy, the upcoming SUV will be comfortable and spacious. When asked if it will be the most spacious in its segment, Tsumura said, “That is a good question but please wait a little bit, we will not disappoint.”
Hybrid technology the right way for Honda India amid the growing EV market?
While the Honda India CEO was tight-lipped about the upcoming SUV, he did make some interesting comments on the company’s direction and timeline towards EVs in India and other countries.
Tsumura said, “Worldwide, the cost of an electric vehicle vs hybrid differs. In some countries, hybrids are much cheaper than an EV because of the taxes. In other countries, prices are the same or even cheaper for EVs. In countries like Japan, hybrids are more affordable which makes them more desirable to our customers. Then there is also the matter of infrastructure, countries that have an extensive charging network to support EVs are more suitable for fully electric cars in the current scenario and for other countries there are hybrids.”
While EVs might be more economical in terms of running costs, for Honda Cars and Tsumura, the decision to pivot towards EV-only needs to be based on a wider discussion. He also said that the high taxation of up to 40% on Hybrids in India affects the overall competitiveness but the technology itself is suitable for a market like India, where EV charging infrastructure is yet to develop. “Ofcourse, the long-term direction is towards EVs but it isn’t the right time just yet”, he added.
Prospects of performance-oriented versions
The first-gen Honda City struck a chord among enthusiasts in the country with its 100 hp producing V-TEC 16 valve engine. In 2006, Honda brought the Civic to India which made waves due to its futuristic exterior and interior design and the 1.8-litre naturally aspirated engine. Later, a Sports version was also launched to cater to the enthusiasts. However, over the years the competition has caught up and not much action has been witnessed from Honda in terms of performance-based models.
Unfortunately, Honda fans can expect no good news in that department immediately. “As Honda India, we are more inclined towards electrification and safety right now. But we will always have our DNA of motorsports and currently, we are gearing up to bring the new SUV to India.” Tsumura said.

On a personal note, Tsumura told TOI Auto, “Ofcourse, the new fifth-gen Honda City is my favourite but I also loved the first-generation model and still keep the brochure with me.”
While no clues about a performance-based Honda were disclosed during the interaction, it is good to know that Takuya Tsumura, Honda India President and CEO, and an enthusiast himself, is steering the ship. What are your thoughts and what would you want to see in Honda’s new compact SUV? Tell us in the comments.
Pictures of US-spec Honda HRV used for representational purposes.