Tokyo, Dec 1: Japanese auto major Honda Motor Co is focussing on development of diesel engines and small compact cars in order to meet specific demands from the Indian market.
"We are aware of the petrol price increase in India but we consider that as a sign of growth in the Indian market... definitely we are currently developing diesel engine cars," Honda R&D Co (Automobile R&D Center) Managing Officer, Chief Officer (Development Operations) Yasuhisa Arai told PTI.
Speaking on the sidelines of Tokyo Motors Show here, he said: "(Indian) market is asking for more diesel engine cars and we are fully aware of that."
Arai also said as far as India is concerned, the company's focus will be on the compact car segment to drive volumes.
"We had developed Brio (compact car) for India, Since we see limited opportunities for large size vehicles, our emphasis is on small compact cars for India," he added.
Asked about the prospects of the Indian market, he said: "At this point Japan, US and China are the three biggest markets (for Honda). In my opinion India is the top growth market and I believe India will soon overtake China. Definitely India will be our emphasis."
On the issue of local sourcing for parts, Arai said weakening of rupee against the dollar has had an impact.
"We are trying to locally procure parts in India and also assemble there. As of now, 80 per cent of our products are localised. We still want to increase it," he added.
Commenting on the impact of floods in Thailand that has affected parts supply to Honda's different locations, he said: "We have started restoration of our plants in Thailand. We will make an announcement of the impact as soon as we are able to make an assessment."
He said water has receded and the company will fully asses the extend of the damage.
At the Tokyo Motor Show, Honda showcased a newly developed engine for automobiles called 'Earth Dreams Technology', which the company claims it will enhance fuel efficiency.