Honda Motor is concentrating on building diesel engines and small compact cars to meet the particular demands of the Indian market.

Top executive Yasuhisa Arai told Press Trust of India (PTI): "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."

Arai added: "We developed the Brio (a subcompact car also made in Thailand) for India; since we see limited opportunities for large size vehicles, our emphasis is on small compact cars for India."

"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 [it] will soon overtake China. Definitely India will be our emphasis."

Aria also said: "We are trying to locally procure parts in India and also assemble there. As of now, 80% of our products are localised. We still want to increase it."

Speaking about the Thai floods that affected parts supply to Honda global facilities, he noted: "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."

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