Honda wants to focus on India and China

Honda Motor Co. has now decided to focus on bright spots India and China, although it will not build an ultra low-cost car to take on Tata Nano. Chief executive Takanobu Ito said on Wednesday, Japan's second-largest automaker was researching a new compact car for Asian markets and more specifically for India, where it launched its first small car, the Honda Jazz hatchback, earlier this year.

When asked about a recovery in these markets Takanobu Ito also said, I wish I had the magic to predict these numbers. In terms of business planning, we are not predicting an immediate recovery to their original levels.

Honda's Japan operations are expected to stay in red though demand has been brisk, helped by generous tax reductions and incentives on hybrids such as its new Insight model.

Mahindra Renault-Nissan and their Indian partner told on Tuesday that they are planning to launch an ultra low-cost car in India in 2012 that will cost less to make than Tata's Nano, the world's cheapest car at around $2,000 when it hit Indian roads earlier this year.

Honda launched the Honda Jazz in India in June, the smallest car and Takanobu Ito said the second small car would be targeted at the expected and accepted price level of the Indian customer. Mitsubishi Lancer Evolution X and Volkswagen Beetle are the new cars that will soon launch in India.

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