Honda Motors foresees strong growth in the Asian markets but has denied that it is seeking partners and will be going ahead alone to capitalise the growth in the region. Honda marks its presence in India as Honda Siel Car India Limited and is planning to launch its small car model by early 2011. Honda had earlier experienced difficult partnerships with Britain’s Rover in 1990 and with General Motors for engine supply deal. However, both the ventures for Honda did not spell a good experience.
"Pursuing bigger volumes is certainly one way of lowering costs but in reality making cars isn't that simple. It's very difficult for two companies to work together towards a common goal. On paper you might end up with the volumes, but in other ways you get huge inefficiencies," said Fumihiko Ike, head of Honda's Asia & Oceania operations.
Honda’s response came as the talks between Nissan and Daimler take shape for procuring larger engines for Nissan from Daimler. Renault and Nissan already have a comprehensive tie-up worldwide and have shared a healthy joint venture for the past decade. On the other hand, Honda’s new car will be Jazz/Fit small compact model that is being developed in-house. Honda needs a sub-compact car in developing markets like India to generate volumes for the company. “Developing key technologies in-house was expensive but also desirable as it enables carmakers to work in conjunction with suppliers to lower parts costs,” said Ike.
