Can Honda Cars Catch Up In India?

Honda Bets On Imports And SUVs To Rebuild Its India Presence

By Shobha Mathur 

What? 

Clearly, Honda Cars India is at a crossroads. After nearly two and a half decades in the country, the Japanese carmaker’s portfolio had shrunk to just three models until a few months ago. But in May, Honda signalled a shift in strategy, unveiling the premium hybrid SUV ZR-V for the Indian market alongside a refreshed version of its long-serving City sedan.

The move reflects Honda’s broader push to revive its position in India through a two-pronged strategy of bringing back premium global models while building a pipeline of mass-market SUVs and electric vehicles for the domestic market.

Honda had also announced more launches during the Japan Mobility Show 2025. 

President and CEO Toshihiro Mibe had said during the event that the company had an aggressive growth map for India. “We are planning to launch 10 or more models by 2030.” 

For the SUVs, which have become mainstream in India, “our plan is for seven models by 2030,” he elaborated. Mass-market SUVs and mid-size cars customised for the Indian market will start launching from 2028 onwards.

The ZR-V hybrid, which will compete with models such as the Skoda Kodiaq, Jeep Meridian and Volkswagen Tiguan R-Line, is set to begin deliveries from July after its launch.

Why Now? 

Despite its limited offerings, Honda has retained a loyal customer base in India, helped by its product quality and service network. 

But its market share has slid from 2% in FY24 to 1.3% in FY26 in the passenger vehicle market, with sales down 6% to 61,943 units YoY in FY26. This has dropped its ranking to the eighth slot in the pecking order from the seventh position in FY25. 

Now, with its new game plan of maintaining a mix of both mass and premium, it has even floated its in-house captive financing arm to provide liquidity to customers. 

Puneet Gupta, director-automotive at S&P Global Mobility, said that since Honda’s sales and market share are under pressure, the automaker has to create some excitement in the market with new product launches. 

It will be difficult to manufacture new models in India that cannot be localised if economies of scale don’t justify that kind of volume. 

“Completely built units won't transform Honda's market share in India, but they can elevate the brand, attract enthusiasts and reinforce Honda's premium and technology credentials,” said Vivek Sharma, director, India -automotive, GlobalData.

The Indian market has evolved significantly over the past few years, with a growing base of affluent consumers willing to pay a premium for differentiated products and global nameplates.

The premium imported models will also allow the company to test consumer response to niche segments without committing to large-scale localisation investments.

The carmaker, however, wants to maintain its predominant play in petrol and strong hybrids, where its City sedan is a frontrunner in addition to battery electric vehicles.  

Globally, Honda plans to launch 13 next-generation hybrid models between 2027 and 2031 and is targeting annual hybrid sales of 2.2-2.3 million units by 2030, underlining the strategic importance of the technology.

Sharma felt India would likely receive a select portfolio rather than a large influx of global products. “The real test will be whether Indian consumers are willing to pay a premium for that technology proposition.”

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25.57 lakh units

That is how many vehicles were sold in India last month, a 22% jump over the 21 lakh units sold in June 2025, according to data from the Federation of Automobile Dealers Associations (FADA).

Overview: Passenger vehicles (PVs) led the growth, rising 29% to 4.1 lakh units, followed by two-wheelers at 18.28 lakh units, up 21%. Tractors grew 25%, while commercial vehicles and three-wheelers rose 17% and 16%, respectively.

FADA noted that alternative-fuel PVs, including CNG, hybrids and EVs, crossed 40% share for the first time, though it urged OEMs to calibrate dispatches through the seasonally weak July window.

Future: President CS Vigneshwar said dealer sentiment stays constructive, with 51.24% dealers expecting growth in July, banking on monsoon recovery, Kharif sowing progress, and easing crude prices after the West Asia ceasefire. FADA called the outlook "cautiously optimistic" ahead of the festive season.

India's Coal Exit At Risk

A potential super El Niño risks straining India's power grid more than any other country's. Rising AC demand, combined with lower hydro and wind output, could cause an 18 terawatt-hour deficit over the year starting July, the largest among 110 nations studied, according to a new report by the Centre for Research on Energy and Clean Air (CREA). This is likely to be met by increased coal generation.

Critical Moment: Coal still supplies over 70% of India's electricity, with its share forecast to drop to 64% by 2027. With El Niño occurring on a two-to-seven-year cycle, India's ability to meet or exceed its solar and storage targets remains the key metric for grid resilience.

The Core earlier reported how El Niño and the West Asia war could together trigger inflationary pressures across the economy.

Setting: CREA director Nandikesh Sivalingam said battery storage and grid upgrades must be accelerated so new demand is met by clean energy rather than coal.

Adani America Relief

The US Department of Justice (DOJ) has urged a federal court to dismiss its criminal case against the Adani Group, arguing that the alleged bribery scheme had only a limited connection to the United States and should not have been prosecuted there. 

Catch Up Quick: The filing marks a sharp reversal from the Biden administration's 2024 indictment, which accused Gautam Adani and other executives of paying about $265 million in bribes to secure solar power contracts in India while misleading US investors during fundraising. The DOJ now says the alleged conduct primarily involved Indian companies, Indian officials and projects in India, making the US jurisdiction too limited to justify prosecution. 

Pivot: It also argued that the case had little chance of securing convictions and did not align with the department's current enforcement priorities. The judge has yet to formally dismiss the charges, but the move signals a significant shift in the Trump administration's approach to overseas anti-corruption cases.

Fewer Deals, More Value

India Inc did fewer deals in the second quarter of 2026, but spent far more on them. A small group of large overseas acquisitions pushed the combined value of mergers, acquisitions and private equity transactions to $36.3 billion, more than double the previous quarter, even as the number of transactions fell 18 per cent to 565, according to Grant Thornton Bharat's Q2 2026 Dealtracker.

Fast Facts: M&A activity drove the quarter with 240 deals worth US $27.9 billion, the highest quarterly M&A value since Q2 2022, led by five billion-dollar cross-border transactions, with outbound deals accounting for 84% of total M&A value.

Sun Pharmaceutical's $11.8 billion acquisition of Organon & Co. was the largest deal and the biggest overseas acquisition by an Indian pharmaceutical company. Private equity moderated to 325 deals worth $8.4 billion, with four new unicorns, Skyroot Aerospace, Square Yards Consulting, Sarvam AI and KreditBee, emerging during the quarter.

By The Numbers: Pharma, Healthcare and Biotech led sector values at US $13.7 billion. IPO activity softened to 11 listings raising US $1.1 billion, while 16 QIP (Qualified Institutional Placement) issuances raised US $2.3 billion.

Record Office Demand

India's office market recorded its strongest-ever first half, with companies leasing 45.5 million sqft of office space in H1 2026, driven by a record 24.6 million sqft leased in the April-June quarter, according to CBRE's India Office Figures Q2 2026 report.

Fast Facts: Developers are also building more. New office supply reached a record 21 million sqft in Q2 and 32 million sqft in the first half of the year. Bengaluru, Delhi-NCR and Mumbai led leasing activity, while Bengaluru, Pune and Ahmedabad added the most new office space.

Global Capability Centres (GCCs), which are offshore offices set up by multinational companies, remained the biggest occupiers, accounting for 43% of all leasing in H1. Meanwhile, flexible workspace operators such as WeWork and Awfis leased the most office space in Q2, ahead of technology companies and banks and financial services firms (BFSI).

How We Got Here: Demand for office space has remained resilient even as global economic uncertainty persists. As The Core has also reported before, multinational companies continue to expand their India operations, particularly through GCCs, making them one of the biggest drivers of commercial real estate demand.

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