Honda Motor Co. has warned that vehicle demand is cooling in emerging markets, especially in Southeast Asia. Despite that, Honda is still confident of its business and is targeting to sell a record 4.5 million vehicles or more in 2014. According to Honda, new, smaller models would boost its chances to to maintain strong sales growth in some key emerging markets like Indonesia and India.
Economic growth outlook in several emerging markets is being plagued by rising interest rates and currency concerns. Honda considers emerging markets as key to its aggressive expansion targets, expecting them to account for half of the 6 million cars it plans to sell in the year to March 2017. That means Honda has to nearly double sales in emerging markets, where it sold between 1.6 million and 1.7 million vehicles last year.
"We were envisioning strong growth in India, Indonesia and Thailand to date," Executive Vice President Tetsuo Iwamura said. He, however, noted that Honda needs to be “a little bit more cautious," adding that demand should still grow in the long-term. Honda is expecting the industry-wide demand for cars in 2014 to fall 15 percent in Thailand and 3 percent in India.
Iwamura disclosed that Honda is seeing no industry growth in Indonesia, but is bullish on its own sales in the country. For 2014, Honda targets a nearly 50-percent surge in sales in India and almost 100-percent hike in in Indonesia. It expects sales in Thailand to drop around 23 percent to 163,000 vehicles, partly due the political instability, Iwamura said. He said that would Indonesia’s share of global sales to at most 3.6 percent from 5 percent in 2013.