Honda’s India problem and the Tata Technologies fix

Honda seeks to slash costs by up to 20% and cut development times in half by partnering with Tata Technologies in India, amid pressure to rethink its approach, according to two sources familiar with the matter. The Japanese automaker is grappling with $12 billion in EV-related losses and is shifting focus to gasoline-electric hybrids while reducing expenses. Reuters reported Honda seeking to cut $9 billion in costs over four years and directing suppliers to reduce prices.

Tata Technologies, a firm spun off from Indian automaker Tata Motors, was chosen for the collaboration due to its extensive network of local suppliers and Honda's belief that it could design vehicles aligned with consumer preferences. Engineers from Tata Technologies will develop vehicles specifically for the Indian market, while Honda will oversee quality standards, retaining control over technology, connectivity, and driver-assistance systems.

The partnership was delayed due to a deadlocked disagreement between Honda and Indian managers over supplier selection. Honda managers preferred to retain established suppliers for quality and consistency, while the Indian team favored greater use of local suppliers to reduce costs and accelerate development in India's largest car market. The first vehicle under development with Tata Technologies is a small SUV targeting the sub-4-meter segment for a 2028 launch, followed by a mid-size SUV.